Financial Accounting 3 – Accounting Concepts Continued More Info: Financial Accounting # 1 Link – Accounting equation, debits & credits, adjusting entries, closing process, & inventory transactions. https://youtu.be/slbij2ovIf8 Financial Accounting #2 – Inventory Flow (FIFO, LIFO. . . ), Subsidiary Ledgers (AR AP), Cash & Bank Reconciliations, Allowance method (AR), Depreciation https://youtu.be/B8R7i_GhX-0 Links to points in presentation. Payroll 1:28 Payroll Introduction 7:31 Regular & Overtime Pay Calculation 12:42 20 Federal Income Tax FIT 18:59 Payroll Legislation 27:49 Payroll Consideration and Tax Forms 44:08 Payroll Periods and Time Frames 51:13 New Employee Tax Forms & Contractor vs Employee 1:08:28 Federal Income Tax FIT – Percent Method 1:16:11 Federal Income Contributions Act (FICA) 1:24:17 Social Security Tax Calculation 1:30:27 FUTA, SUTA Workers Compensation 1:35:20 Medicare Tax Calculation 1:38:51 Federal Unemployment Tax Act Calculation 1:40:26 Payroll Ethics & Practices 1:51:02 Employer Taxes Calculation 1:58:21 Employer Responsibilities and Processes 2:06:12 Payroll Expense Journal Entry 2:16:52 Payroll Tax Expense Journal Entry 2:25:09 Pay Payroll Tax Expense Journal Entry 2:34:00 Form 941 2:48:29 Payroll Controls and Documentation 2:56:41 Form 940 3:08:16 Form W-3 & W-2 3:20:13 Reconciling Year End Payroll Forms 3:29:32 Minimum Wage & Nonexempt Employees 3:35:05 Payroll Calculations 3:37:51 Overtime Calculation 3:50:45 Payroll Register 4:00:26 Fringe Benefits 4:06:34 Federal Income Tax (FIT) 4:11:56 Other Deductions & Payment Methods 4:20:04 Taxes Employer Employee 4:29:25 FICA Employer 4:34:22 Federal & State Unemployment Tax Partnerships 4:43:41 Partnerships Introduction 5:04:33 Partnership Set Up New Partnership 5:15:48 Partnership Income Allocation 5:35:52 Partnership Withdraws 5:45:55 Partnership Closing Process 5:58:15 Partnership Partner Leaves Partnership Cash Equal to Capital Account 6:01:58 Partnership Partner Leaves Partnership Cash less then Capital Account 6:09:20 Partner Leaves Partnership Cash Greater then Capital Account 6:15:45 Add New Partnership – Cash More Then Capital Account 6:25:08 Add New Partner – Cash Less Then Capital Account 6:40:34 partner sells partnership interest to a new Partner 6:50:39 Partner sells partnership interest – Cash Received Less Then Capital 6:56:14 Partner sells partnership interest – Cash Received Greater Than Capital 7:03:14 Partnership Liquidation Gain on sale of Assets 7:20:08 Partnerships Liquidation Loss on sale of Assets 7:34:05 Partnership Liquidation Partner Pays Partnership for Negative Capital Account 7:53:29 Partnership Liquidation Partner Does Not Pays Partnership for Negative Capital Account Corporations 8:13:35 Corporation Introduction 8:41:09 Stock for Cash 8:54:05 Issuing Stock for Non-Cash Asset 9:04:42 Dividends Overview 9:15:10 Cash Dividends 9:24:57 Stock Dividends & Stock Split 9:35:33 Preferred Stock Introduction 9:41:48 Preferred Stock Example 9:51:19 Treasury Stock 10:08:49 Statement of Retained Earnings 10:21:46 Corporations Statement of Stockholders Equity 10:45:47 Corporation Closing Process 11:01:35 Corporations Earning Per Share Because it’s fun. This may not be the first thing that enters everyone’s mind when asked this question, but hear me out, make an honest effort to learn the first two chapters, and then make your decision as to the validity of the statement that accounting is fun. There are, of course, many practical reasons to learn accounting including: • Accounting has been described as the language of business. Whether we work for a company or own a business accounting helps us understand the business. It can help us see the big picture. • Accounting principles are applicable to our personal finances. Whether we have a large or small amount of resources we still need to manage our personal finances. • Accounting helps with investing. When investing for things like retirement we may consider investing in stocks and bonds. Accounting helps understand the financial statements of companies to make better investment decisions. Other reasons for learning accounting, which may not be so evident, are that accounting develops critical thinking, logic, and practical decision making skills. These skills can be applied to all areas of life. Accounting also provides the same kind of a sense of satisfaction we receive when we complete a puzzle, master a new musical pattern, or play a game of checkers. We get that same shot of dopamine when we can say we figured it out and “it’s in balance”. Accounting is comparable to setting up and playing a checker game. Checkers are set up on a spreadsheet, in accordance to a set of rules, and we move the pieces in accordance to a set of rules. Once these rules are leaned the game can be enjoyable. Accounting will have a similar set of rules, a similar board, and yes, once the rules are learned, it can be enjoyable. Items needed for setting up and
Financial Accounting #2 – Intermediate Accounting Concepts Financial Accounting # 1 Link – Accounting equation, debits & credits, adjusting entries, closing process, & inventory transactions. https://youtu.be/slbij2ovIf8 Links to relevant parts of the presentation. Inventory Costs – FIFO LIFO Weighted Average 1:14 Inventory Tracking 6:52 Inventory Methods Explained and compared FIFO LIFO Ave 15:23 Inventory Costs 24:02 Consistency Concept 27:48 Lower of Cost or Market 31:52 Perpetual & Periodic Inventory Systems 42:06 First In First Out (FIFO) Periodic System 1:16:23 Last In First Out LIFO Periodic 1:50:33 Weighted Average Periodic System 2:19:40 First In First Out FIFO Explained 2:28:52 Last In First Out LIFO Inventory Method Explained 2:36:33 Average Inventory Method Explained Subsidiary & Special Journals 2:43:36 Special Journals Subsidiary Ledgers 2:59:38 Accounts Receivable AR Subsidiary Ledger Explained 3:08:38 Accounts Payable AP Subsidiary Ledger 3:16:30 Sales Journal Service Company 3:25:46 Sales Journal Merchandising Co. 3:36:25 Purchases Journal Service Company 3:40:26 Purchase Journal Merchandising Co. 3:52:40 Cash Receipts Journal 4:15:19 Cash Payments Journal Service Company 4:28:59 Cash Payments Journal Service Company Cash, Bank Reconciliations, & Cash Internal Controls 4:28:59 Internal Controls 4:47:57 Cash Internal Controls Overview 4:55:58 Cash Receipts Internal Controls 5:04:05 Cash Disbursements Internal Controls 5:15:12 Bank Reconciliation-Accounting%2C Financial 5:31:50 60 Petty Cash Accounts Receivable – Allowance Method & Direct Write-Off Method 5:51:55 Receivables Introduction 6:07:18 Accounts Receivable Journal Entries 6:17:23 Accounts Receivable AR Subsidiary Ledger Explained 6:26:23 Direct Write Off Method 6:46:20 Allowance Method Accounts Receivable-financial accounting-Accounting%2C Financial 7:16:57 Allowance Method VS Direct Write Off Method 7:37:34 Allowance Method % Accounts Receivable vs % Sales Method 7:56:34 Notes Receivable 8:21:00 Interest Calculations 8:41:18 90 Interest Calculations Depreciation Calculation & Fixed Assets 9:01:42 Property Plant & Equipment 9:12:56 Property Plant & Equipment Lump Sum Purchase 9:18:52 Calculating Depreciation Straight Line – how to calculate 9:50:07 Calculating Depreciation Double Declining Balance – how to calculate 10:28:35 Calculating Depreciation Units of Production – how to calculate 11:02:26 Change In Estimates 11:12:47 Disposals Fully Depreciated No Cash Received 11:20:20 Disposal Fully Depreciated & Cash Received u 11:27:58 Disposal – Not Fully Depreciated 11:36:24 Disposal Not Fully Depreciated & Cash Received 11:45:02 Partial Year Depreciation
Financial Accounting – Accounting cycle – We cover most introductory financial accounting topics in detail. Links to relevant parts of the video below. Financial Accounting Overview: 0:17 Why Learn Accounting 19:58 Accounting Objectives 29:22 Accounting Equation 44:36 Balance Sheet 1:01:58 Income Statement 1:15:22 Statement of Equity 1:26:11 Balance Sheet & Income Statement Relationship 1:49:58 Cash Method vs Accrual Method 2:06:17 Ethics Profession 2:22:19 Financial Transaction Rules 2:36:07 Financial Transaction Thought Process 2:47:29 Cash Transactions 3:04:24 Accounts Receivable Transactions With Accounting Equation 3:14:50 Accounts Payable Transactions with Accounting Equation Debits and Credits Financial Transactions 3:40:12 Debits & Credits 3:56:01 Rules for Using Debits & Credits 4:14:28 Transaction Thought Process 4:28:08 Trial Balance 4:43:10 Cash Journal Entries with Debits and Credits 5:01:11 Accounts Receivable Transactions Using Debits and Credits 5:11:16 Accounts Payable Transactions Using Debits and Credits 5:33:44 General Ledger Adjusting Entries: 5:48:11 Accounting Cycle Steps in The Accounting Process 5:41:11 Types of Adjusting Journal Entries 6:15:33 Adjusting Journal Entry Rules 6:20:16 Why Use a Worksheet in Adjusting Process 6:31:29 Adjusting Journal Entries Thought Process 6:42:42 Adjusting Entries 6:47:54 Adjusting Entries Unearned Revenue 6:47:54 Adjusting Entries Wages or payroll 6:58:06 Adjusting Entry Accounts Receivable or income or revenue 7:03:27 Adjusting Entries Insurance 7:09:48 Adjusting Entries Depreciation 7:14:58 Reversing Journal Entries – Accrued Revenue 7:24:12 Balance Sheet Current Assets From Trial Balance 7:14:58 Balance Sheet Property Plant and Equipment from Trial Balance 7:33:31 Balance Sheet Liabilities 7:37:33 Balance Sheet Equity Section 7:44:00 Income Statement From Trial Balance 7:53:13 Statement of Equity From Trial Balance 8:02:12 Financial Statement Relationship Closing Process 8:08:29 Accounting Cycle 8:18:31 Closing Process Explained 8:25:51 Post Closing Trial Balance 8:29:56 One Step Closing Process 8:41:46 Two Step Closing Process 8:52:40 Four Step Closing Process – Step one 8:38:53 Four Step Closing Process – Step Two 9:02:21 Four Step Closing Process – Step Three 9:07:51 Four Step Closing Process – Step Four 9:15:17 Post Closing trial Balance & Financial Statements Merchandising Transactions – Transactions With Inventory 9:21:39 Accounting Cycle for Merchandising Company 9:24:56 Perpetual Inventory System 9:43:32 Periodic Inventory System 10:06:02 Perpetual vs. Periodic Inventory Systems 10:22:52 Merchandising Transactions – Purchaser and Seller 10:28:45 Purchases of Inventory Journal Entry 10:34:01 Sale of Inventory Journal Entry – Perpetual Inventory Method 10:41:13 Sales Discount Vs Purchases Discount 10:46:52 Purchase Discount Journal Entry 10:53:27 Sales Discount Journal Entry 11:00:45 Inventory Shrinkage 11:09:51 Sales Returns and Allowances Transaction 11:25:51 Income Statement Introduction 11:32:47 Financial Statements for a Merchandising Company Business Objective To generate revenue by providing goods or services to a community. For example, the mission statement of Auto-Owner Insurance is: “Our Goal is to provide the best claim service in the industry” (Mis). A company’s mission should describe the ideal goods and services that the company provides. The success of a company’s ability of achieve its mission will be measured, in part, by revenue. If revenue cannot be produced the good and services the company strives to provide will not be provided because the company will eventually go out of business. The business objectives should be separated from personal objectives. This separation is not an indication that the business objective is more important but because it will help us measure the success of both the business objectives and as our personal objective. Our business objectives can be thought of as fitting within our personal objectives, meaning they are separate from the personal objectives but the personal objectives are the primary goal. Our personal objectives will vary from person to person but can be thought of as the desire to live well for our purposes here. Separating business and personal objectives allows us to measure both better, providing better tools to achieve more goals in both realms. For example, if we started a small business one of the first things we would consider doing is setting up a separate business bank account and or business credit card. For the most part, everything we purchase is either an expense or an asset. The question we need to consider is whether the purchase is a business expense or asset or a personal expense or asset. This questions can be answered by asking what the objective of the purchase are. For example, if we purchased a building to be used for the business it would be a business asset because we purchased it to h
Accounting is divided into two major groups; Financial Accounting & Managerial Accounting.
Financial Accounting – What Needs To Be Known
Financial accounting has the end goal of generating financial statements, financial statements designed with external user needs in mind. The aim of financial accounting toward external users may seem strange at first because financial data is required and used for internal, managerial, decision making as well but external users have needs that require more reliance on financial statements in many ways.
External users are users outside the company and include investors, creditors, the internal revenues service, and customers. Companies need these external users for things such as investments, loans, and to follow laws and regulations.
External users do not have intimate knowledge of the business and therefore need assurance to increase the level of trust, trust being a necessary component for business transactions to take place. To increase confidence levels, financial statements are required to follow a strict format of rules designed to standardize the financial reporting. Standardization allows for the comparison of financial information across time and between different companies.
Managerial Accounting-What Needs To Be Known
Managerial accounting has the goal of generating relevant information for internal decision makers to make sound decisions, for management. Managerial accounting does include the use of the same financial information generated in financial accounting, but information is not required to be in a particular format, managerial accounting being less regulated. Management has intimate knowledge of the company, and therefore there is less need for regulations on the format of data and information. Management will determine the best format for managerial statements to assist in making the best decisions.
Because managerial accounting is less regulated, it is commonly thought that managerial accounting will differ greatly from organization to organization. While it is true that managerial accounting practices will vary from company to company, there are also best practices which are applied, practices that have stood the test of time, those that have helped good companies be great. The study of managerial accounting is the study of best practices used to make good business decisions.
Financial accounting developed in much the same way, businesses looking for best practices to compile data for both themselves and external users. Over time financial accounting has solidified those best practices into a standardized form. Standardization often limits innovation but does provide a clear format for external users, this being one of the trade-offs related to regulation. We will talk more about the need for standardization in a profession like account when we discuss what a profession is and the need for ethics and regulations within a profession.