... 49
Clearly, an accounting system needs to standardize the forms and procedures
for processing and recording all normal, repetitive transactions and should
control the generation and handling of these ... (non-government) sector for making pronouncements
on GAAP — and for keeping these accounting standards up-to-date — is the
Financial Accounting Standards Board (FASB). A...
... profit accounting a fascinating challenge. For one thing, you have to
understand how a business operates and its strategies in order to account for
its profit.
Making a profit and accounting for ... but be
prepared for many, many references. Except for larger entities that employ
their own accounting software and information technology experts, most
businesses need the a...
... particular assets and liabil-
ities and sales revenue and expenses. Business managers need a good under-
standing of these connections to control assets and liabilities. And outside
investors and creditors ... 5-3:
The
connections
between
sales
revenue and
expenses
and the non-
cash assets
and
liabilities
driven by
these profit-
making
activities.
107
Chapter 5: Reporting...
... pay for a business that has never made a profit and whose liabilities
are more than its assets? There’s no simple formula for calculating the market
value for a business based on its profit performance ... number
and the bottom-line profit number in the income statement. The cash flow
number is based on actual cash inflows and outflows; the profit number is
based on accounting...
... acquisi-
tion, had costs of $100 , $102 , $104 , and $106 . If you sell three units during the
period, the LIFO method calculates the cost of goods sold expense as follows:
$106 + $104 + $102 = $312
The ending ... the
items): $100 , $102 , $104 , and $106 . By the end of the period, you have sold
three of these units. Using FIFO, you calculate the cost of goods sold expense
as follows:...
... Motors and a copy of my book, Accounting For
Dummies, 4th Edition, hot off the printing presses.
Most production (manufacturing) processes are fairly complex, so product cost
accounting for manufacturers ... issues, and so on. In short,
accounting reports provide only part of the information needed for business
decisions, though an essential part for sure.
Making reports...
... be ready for serious
concentration.
Staying on Top of Accounting and
Financial Reporting Standards
Standards and requirements for accounting and financial reporting don’t stand
still. For many ... business
and finance in general, and understand basic accounting terminology and
measurement methods in particular. Financial reporting standards and prac-
tices, in other...
... legal
exposure, and so on.
Private and public businesses are bound by the same accounting rules for mea-
suring profit and for valuing assets, liabilities, and owners’ equity, and for dis-
closures ... and other tests to get a
feel for the financial performance and position of the business. (Chapters 13 and
17 explain how readers of financial reports get a fix on the...
... statements
following authoritative accounting and financial reporting standards and that
the footnotes to the financial statements cover all important points and issues.
Unfortunately, the audit report ... more information on audits and the auditor’s report.
The auditor judges whether the business’s accounting methods are in accor-
dance with appropriate accounting and financi...
...
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