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The easy way to master an intermediate accounting course
Intermediate accounting courses are required for students seeking bachelor's degrees in accounting and often for degrees in finance, business administration, and management. Intermediate Accounting For Dummies provides you with a deeper and broader level of accounting theory, serving as an excellent course supplement and study guide to help you master the concepts of this challenging ...
The easy way to master an intermediate accounting course
Intermediate accounting courses are required for students seeking bachelor's degrees in accounting and often for degrees in finance, business administration, and management. Intermediate Accounting For Dummies provides you with a deeper and broader level of accounting theory, serving as an excellent course supplement and study guide to help you master the concepts of this challenging program.
With easy-to-understand explanations and realworld examples, Intermediate Accounting For Dummies covers all the topics you'll encounter in an intermediate accounting course: the conceptual framework of Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), financial ratio analysis, equity accounting, investment strategies, financial statement preparation, and more
With the help of Intermediate Accounting For Dummies, you'll discover the fast and easy way to take the confusion out of the complex theories and methods associated with a typical intermediate accounting course.
Part I: Introducing Financial Accounting and Standards 7
Chapter 1: Seeing the Big Picture of Financial Accounting 9
Chapter 2: Walking Through the Conceptual Framework of Financial Accounting 23
Chapter 3: Invaluable Valuation 43
Chapter 4: Reviewing the Accounting System 51
Part II: Preparing and Using Financial Statements 65
Chapter 5: Posting Income Statement Profit and Loss 67
Chapter 6: Reporting Assets and Claims: Keeping Your Balance (Sheet) 83
Chapter 7: Follow the Money! Studying Cash Flow 101
Chapter 8: Time Is Money: Looking at the Time Value of Money 115
Part III: Homing in on Current and Noncurrent Assets 127
Chapter 9: Assessing Cash and Receivables 129
Chapter 10: Inventory Cost Flow Assumptions 145
Chapter 11: Buying and Selling Property, Plant, and Equipment (PP&E) 167
Chapter 12: Recognizing Depreciation, Impairments, and Depletion 183
Chapter 13: Keeping Track of Other Noncurrent Assets 197
Part IV: Analyzing Debt and Equity 207
Chapter 14: Tracking Current Liabilities and Contingencies 209
Chapter 15: Planning for Long-Term Obligations 227
Chapter 16: Letting Owners Know Where They Stand: The Equity Section 241
Part V: Accounting for Advanced Intermediate Issues 257
Chapter 17: Accounting for Income Taxes 259
Chapter 18: Accounting for Leases 277
Chapter 19: Fessing Up: Correcting Errors
and Reporting Changes in Methods 295
Chapter 20: Is That You, Revenue? Revenue Recognition Concepts 313
Part VI: The Part of Tens 327
Chapter 21: Ten Common Notes to the Financial Statements 329
Chapter 22: Ten Ratios for Financial Statement Analysis 337
Cheat Sheet for Intermediate Accounting For Dummies
From Intermediate Accounting For Dummies by Maire Loughran
Intermediate accounting builds on basic financial accounting skills. It's still all about generally accepted accounting principles (GAAP) and preparing financial statements. The material that intermediate accounting covers, however, goes beyond basic accounting scenarios. Think of financial accounting as the appetizer and intermediate accounting as the main course
What Does Intermediate Accounting Cover?
Intermediate accounting delves into the more complex, more challenging aspects of accounting practices. It covers topics and accounting situations that go beyond the basics, including the following:
• Time value of money: Intermediate accounting involves advanced time value issues, such as deferred annuities and long-term bonds. Annuities are multiple payments over a period of time that you either make or receive. Deferred annuities are a type of annuity contract that delays payments to the investor until the investor elects to receive them. Long-terms bonds are bonds a business holds in another company that extends out more than twelve months into the future.
• Accounting for retail inventory: Inventory cost-flow assumptions, which are how the cost of inventory expenses on the income statement, are a big topic in financial accounting. An interesting expansion on this topic in intermediate accounting is accounting for retail inventory.
The retail inventory method uses a cost ratio to convert the ending inventory valued at retail to cost. Basically, this works by taking goods available for sale at cost and dividing them by goods available for sale at retail. You can then multiply sales by the resulting percentage to come up with ending inventory at cost.
• Accounting for property, plant, and equipment: Intermediate accounting gets into the nitty-gritty of accounting for an involuntary conversions such as theft. When this happens, a company has to record the difference between insurance proceeds and the asset's net book value as gain or loss on disposal of asset.
• Research and development expenses (R&D): This thorny topic is rarely discussed in your financial accounting class. Intermediate accounting shows you how to handle the costs of R&D, such as when a drug company is developing a product to bring to market.
• Accounting for income taxes: No one likes income taxes and your financial accounting textbook discusses this topic minimally. Intermediate accounting to the rescue! Intermediate accounting covers how to calculate the difference between financial and tax accounting. A major difference between the two is financial and tax depreciation. Financial depreciation takes the long-way home while tax depreciation takes the short cut through the vacant lot! So net income between the two will differ.
Important Differences between U.S. and International Accounting Standards
Your intermediate accounting textbook homes in on generally accepted accounting principles (GAAP) in the United States, but, where applicable, points out international perspectives for accounting for the same events. Both positions are noted because GAAP and international accounting standards are on the road toward convergence, and one set of global accounting standards could evolve.. Here are some key differences between U.S. and international accounting standards:
• Extraordinary items: These items are unusual in nature and infrequent in occurrence. An example could be losses resulting from a major casualty such as a fire. US GAAP allows special financial reporting for these types of events while international standards do not.
• Accounting for leases: Whether a company expenses lease payments or treats them like loan payments divvying up the payment between principle and interest under US GAAP depends on GAAP capitalization rules. International standards are more user-friendly, and look at the basic facts and circumstances of the lease to determine whether lease payments are expensed or capitalized.
• Tax deferrals: Deferrals arise on the balance sheet because of the difference between financial and tax income. US GAAP allows for the classification of the deferrals as current or non-current, depending on the situation. International standards only allows for non-current treatment of these deferrals.
• Balance sheet preparation: It's Financial Accounting 101 knowledge that current accounts show up on the balance sheet before non-current ones. For example, current assets like cash list before property, plant, and equipment. However, companies using international standards often list non-current liabilities before current ones.
• Monetary assumptions: US GAAP ignores the effect of inflation and deflation for accounting measurement and analysis. Using international accounting standards, countries with persistent inflation will general a price-index to adjust for inflation's effect on their financial reporting.
Posted May 2, 2012
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