Current Assets

This book is the second of seven books which introduces the basic principles of accounting, focusing primarily on liquid assets. It introduces enhanced income statements, sales, cash discounts, the control structure, and inventory accounting. Details concerning cash and highly-liquid investments, cash management, controls for cash receipts and disbursements, and bank account reconciliations are discussed. Accounts receivable, costs and benefits of selling on credit, considerations for uncollectible receivables, notes receivable and interest are also discussed. In addition, the fundamentals of inventory costing methods, inventory management, and ratio analysis are introduced.

1. Sales
2. Sales Returns and Allowances
3. Trade Discounts
4. Credit Cards
5. Cash Discounts

1. Merchandise Acquisition
2. Periodic Inventory System
3. Purchase Returns and Allowances
4. Cash Discount
5. Gross Recording of Purchases/Discounts
6. Net Recording of Purchases/Discounts Lost
7. Comparison of Gross vs. Net
8. Freight Charges
9. The Calculation of Net Purchases
10. Cost of Goods Sold
11. Detailed Income Statement for Merchandise Operation
12. Closing Entries

1. Analysis of a Detailed Income Statement

1. Internal Control in the Merchandising Environment
2. Internal Control and the Purchasing Cycle
3. Generalizing About Control

1. Cash Equivalents

1. Strategies to Enhance Cash Flows

1. Comprehensive Illustration of Bank Reconciliation
2. Proof of Cash

1. Replenishment of Petty Cash
2. Cash Short and Over
3. Increasing the Base Fund

1. An Illustration
2. Rationale for Fair Value Accounting
3. Alternative: A Valuation Adjustments Account
4. Dividend and Interest
5. Derivatives

1. Credit Sales
2. Credit Cards

1. Direct Write-off Method

1. Determining the Allowance Account
2. Writing off Uncollectible Accounts
3. Collection of an Account Previously Written off
4. Matching Achieved
5. Monitoring and Managing Accounts Receivable

1. Accounting for Notes Receivable
2. A Dishonored Note
3. Notes and Adjusting Entries

1. Determining Which Goods to Include in Inventory

1. Determining the Cost of Ending Inventory
2. Costing Methods
3. First-in, First-out Calculations
4. Last-in, First-out Calculations
5. Weighted-Average Calculations
6. Preliminary Recap and Comparison
7. Detailed Illustrations
8. FIFO
9. LIFO
10. Weighted-Average
11. Comparing Inventory Method
12. Specific Identification

1. Perpetual FIFO
2. Journal Entries
3. Perpetual LIFO
4. Moving Average

1. Measuring Market Value
2. Application of the Lower-of-Cost-or-Market Rule

1. Gross Profit Method
2. Retail Method