Roadmap ACCT 642-G1, G2, G4

Prepared by Professor Chang

Balance Sheet (aka Statement of Financial Position)
As of December 31, 2018 Statement of Changes in Equity
Asset Liability For the year ended December 31, 2018
Current Assets Accounts Payable Equity, Beginning of the Year xxx
Cash Unearned Revenue Stock Issuance xxx
Marketable Securities Accrued Liability Treasury Stock (xxx)
Accounts Receivable Bonds Payable Net Income xxx
Prepaid Expense Dividend Declared (xxx)
Inventory Equity, End of the Year xxx
Non-current Assets Equity
Long-term Investment Share Capital
PP&E Retained Earnings
Intangibles
Other Assets
Statement of Comprehensive Income
For the year ended December 31, 2018
Sales (aka Revenue) xxx Revenue, net (= sales – sales discount, return, allowance)
Cost of Goods Sold (xxx)
Gross Margin (aka Gross Profit) xxx
Operating Expenses (xxx) e.g., SG&A, bad debt expense, and depreciation expense
Operating Income (aka Operating Profit) xxx Income
Other Income & Gain xxx e.g., interest income, gain on sale of PP&E Statement
Other Expense & Loss (xxx) e.g., interest expense, loss on early retirement of bonds
Income Tax (xxx)
Net Income xxx
EPS (Basic & Diluted EPS) xxx
Other Comprehensive Income xxx e.g., foreign currency translation adj.
Comprehensive Income xxx
Statement of Cash Flows
For the year ended December 31, 2018
Cash Generated by Operating Activities xxx Note: OCF can be computed using either a direct or an indirect method.
Cash Used in Investing Activities (xxx)
Cash Used in Financing Activities (xxx)
Increase or Decrease in Cash xxx
Cash, Beginning of the Year xxx
Cash, End of the Year xxx
Roadmap ACCT 642-G1, G2, G4
Prepared by Professor Chang

• Stock vs. Flow accounts

• Accounting equations:
1) Asset = Liability + Equity
2) Net Income = Revenue – Expense; Ending Retained Earnings = Beginning Retained Earnings + Net Income – Dividend

• Debit and credit rules

- Business transactions include two parts (giving and receiving) and thus accounting is based on a double entry system.
- Debit is on the left and credit is on the right.
- An increase in Asset, Expense, and Dividend is on debit; An increase in Liability, Equity, and Revenue is on credit.

• Examples
- A decrease in PP&E
- An increase in Sales
- A decrease in Interest Revenue
- An increase in Rent Expense
- An increase in Dividend