Professional Documents
Culture Documents
The Basics
1. Accounting Equation: STATEMENT OF OWNERS EQUITY
Assets = Liabilities + Owners Equity A summary of the changes in the owners equity of a business en-
tity that have occurred during a specific period of time, such as a
month or a year.
2. T Account:
Account Title BALANCE SHEET
A list of the assets, liabilities, and owners equity of a business en-
Left Side Right Side tity as of a specific date, usually at the close of the last day of a
debit credit month or a year.
5. Financial Statements:
INCOME STATEMENT
A summary of the revenue and expenses of a business entity for a
specific period of time, such as a month or a year.
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FINAL
10. Shipping Terms: 16. Contribution Margin Ratio Sales Variable Costs
FOB Shipping Point FOB Destination Sales
Ownership (title)
passes to buyer when 17. Break-Even Sales (Units) Fixed Costs
merchandise is.................... delivered to delivered to Unit Contribution Margin
freight carrier buyer
Transportation costs
are paid by .......................... buyer seller 18. Sales (Units) Fixed Costs Target Profit
Unit Contribution Margin
11. Format for Bank Reconciliation:
19. Margin of Safety Sales Sales at Break-Even Point
Cash balance according to bank statement ...................... $xxx Sales
Add: Additions by company not on bank
statement .......................................................... $xx
Bank errors ............................................................. xx xx 20. Operating Leverage Contribution Margin
$xxx Income from Operations
Deduct: Deductions by company not on bank
statement .......................................................... $xx 21. Variances
Bank errors ............................................................. xx xx
Adjusted balance .................................................................. $xxx Direct Materials = Actual Price per Unit Actual Quantity
Price Variance Standard Price Used
Cash balance according to companys records ................ $xxx
Add: Additions by bank not recorded by company .. $xx Direct Materials = Actual Quantity Used Standard Price
per Unit
Company errors..................................................... xx xx Quantity Variance Standard Quantity
$xxx
Deduct: Deductions by bank not recorded
by company...................................................... $xx
Direct Labor = Actual Rate per Hour Actual Hours
Worked
Rate Variance Standard Rate
Company errors..................................................... xx xx
Adjusted balance .................................................................. $xxx Direct Labor = Actual Hours Worked Standard Rate
per Hour
Time Variance Standard Hours
12. Inventory Costing Methods:
Variable Factory Actual Budgeted Factory
1. First-in, First-out (FIFO)
Overhead Controllable = Factory Overhead for
2. Last-in, First-out (LIFO)
Variance Overhead Amount Produced
3. Average Cost
Fixed Factory Budgeted Factory Applied
13. Interest Computations: Overhead Volume = Overhead for Factory
Interest Face Amount (or Principal) Rate Time Variance Amount Produced Overhead
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