... uses:
(a) the gross method.
(b) the net method.
7-2 1
Cash Discounts
7-2 2
Learning Objectives
Describe the accounting treatment for
merchandise returns.
7-2 3
Sales Returns
Merchandise
returned by ...
merchandise.
7-2 5
Sales Returns and Allowances
Sales Returns and Allowances is a contra
account that reduces Sales Revenue in the
current accounting period.
7-2 6
Learn...
... or determinable
6-2 5
Some notes do not include a stated
interest rate. We call these notes
noninterest-bearing notes.
Even though the agreement states it
is a noninterest-bearing note, the ...
as the interest rate.
No Explicit Interest
6-2 6
Statement of Financial Accounting Concepts No. 7
“Using Cash Flow Information and Present Value in
Accounting Measurements”
The objecti...
... %.
9-2
Learning Objective
Understand and apply the lower-of-cost-
or-market rule used to value inventories.
9-3 0
Retail Inventory Method - Average Cost
Matrix, Inc. uses the average cost retail ... the Cost-to-Retail %.
The primary difference
between this and our earlier,
simplified example, is the
inclusion of markups and
markdowns in the computation
of the Cost-to-Retail %....
... Value
Residual Value
Sum-of-the-Years’ Digits (SYD)
1 1-2 1
0
2000
4000
6000
8000
10000
12000
14000
16000
1 2 3 4 5
Life in Years
Depreciation
Sum-of-the-Years’ Digits (SYD)
1 1-2 2
Declining-Balance (DB) ... years.
Sum-of-the-Years’-Digits (SYD)
1 1-1 8
2
Use this in your computation of SYD
Depreciation for Years 1 & 2.
Use this in your computation of SYD
Depreciation for Years 1...
... income.”
1 2-1 4
Securities Available for Sale
Net unrealized holding gains and losses from securities
available-for-sale are reported in the equity section of
the balance sheet.
1 2-1 5
Securities ... date.
1 2-2 3
Disclosures
1 2-2 4
Learning Objectives
Explain what constitutes significant influence
by the investor over the operating and financial
policies of the investee.
1 2-...
... stilldisclose
the pro-forma net income and pro-forma earnings per share (if presented), as if the fair
value method had been used to account for the stock-based compensation cost. Illus-
tration 1 7-5 illustrates ... Share Re-
porting: Time for an Overhaul?’’ Accounting Horizons (September, 1989), pp. 2 1-2 7 which rec-
ommends an expanded disclosure format but elimination of many of th...
... at the 5% level in the two-tailed t-test (for the mean) or the Wilcoxon
test (for the median).
** Significantly different from zero at the 1% level in the two-tailed t-test (for the mean) or the ... isrr
it ft
the 1-month Treasury bill rate in month t; is the month t return on ther
mt
value-weighted index of all NYSE, AMEX, and NASDAQ stocks; isSMB
t
the small- minus big-firm return, that ... t...