BUS 20 FINAL STUDY GUIDE
BUS 20 FINAL STUDY GUIDE BUS 020
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This 3 page Study Guide was uploaded by Aaron Kleinert on Thursday June 2, 2016. The Study Guide belongs to BUS 020 at University of California Riverside taught by B. Samuelson in Spring 2016. Since its upload, it has received 270 views. For similar materials see Financial Accounting and Reporting in Business at University of California Riverside.
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Date Created: 06/02/16
Study Guide Bus 20 Final Definitions: Ratios of Solvency ability to pay debts at any time. (total liabilities, debtasset ratio, EBIT, interest coverage ratio) Accounting Equation A=L+E, know AL = E!!! Revenue recognized @ order/deliver/collect/deposit. When action done and delivered. Dividend Not on Income Statement, on Retained Earnings. Dividends Declared on Retained Earnings Dividends Paid on Cash Flow Income Statement Revenue, Expense, Gains, Losses(cost accumulated depreciation) Current Assets Used within one year or operating cycle (whichever is longer) “Current” Liabilities Pay within one year within date on the balance sheet. Calculations: Cash from Operations (Direct receipts and statements) (Indirect method) Income from Operations on MultiStep Income Statement (CH 6) Net Income from transactions (Exclude dividends) Income, Retained Earnings, Balance Sheet (In Order) EPS (Net Income Dividend preferred) / # outstanding (issued treasury) Current Ratio (Balance Sheet, unclassified) NOT PPE/Liabilities/Assets Debt to Assets Ratio Current liabilities/ Current assets Book Value of Equipment cost depreciation Gross Profit sales revenue COGS Adjust Income for expiration of prepaid expenses Inventory&Receivable Turnover/ Inventory Sales&Receivable Collect Days compute gain/loss on depreciation (received book value) compute straight line depreciation. (price portion of time elapsed price) cost of truck from list of expenditures incurred during acquisition.(not include license and insurance) Adjustment for uncollectible accounts by % sales method. Cash Realizable Value of accounts receivables. Interest of Note Receivable principle x rate x time elapsed Interest of Note Payable principle x rate x time elapsed Net Payroll when incurring taxes. gross paid social security income tax Cash Flow Cash coverage % common size in balance sheet/ income statement PE Ratio Timing of: Balance Sheet point in time (dec. 31st) Income Statement period of time (January to December) Cash Flow Retained Earnings period of time, includes income and dividends. Describe: effects of credit sale and collecting receivables receiving payment in advance of service (unearned revenue) any effects of receiving a bill for last month’s utilities.(up liability, down equity) Periodic inventory system low value price, high #, no ID serial number Perpetual Inventory System large value price, ID serial number, low #. Effects of FIFO vs LIFO Inventory Items when purchased FOB (at shipping) vs Consignment (on my inventory on balance sheet.) What does Accumulated Depreciation represent? Cost over periods of use. Advantages/ Disadvantages of Corporate Organization Transaction of the intangible “Goodwill”(buy a whole business, pay too much) Conditions business hold when issuing bonds at discount/premium. plant assets # original cost of acquiring assets high PE ratio in assets evaluation (over 20= bad) Business events that increase or decrease ratios. current ratio increasing= good, more assets debt to assets increasing= bad, more risk Interpret Ratios* RATIO QUESTION ON TEST Current Ratio=2.0, want to increase it (4/2, asset/liability) 1 buy inventory on credit X 2 buy inventory with cash X 3 pay accounts payable ANSWER= 3
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