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Financial Accounting Index

Home/Financial Accounting Index

Financial Accounting

Introduction

  • Introduction to GAAP

  • Accounting Standard Setting Process

  • Financial Accounting Standards Board (FASB)

  • Emerging Issues Task Force (EITF)

  • Financial Accounting Foundation (FAF)

  • Accounting Standards Codification (ASC)

  • International Accounting Standards Board (IASB)

  • FASB vs. IASB

  • FASB Conceptual Framework

  • SEC Acts of 1933 and 1934

  • Sarbanes-Oxley Act (SOX)

  • Public Company Accounting Oversight Board (PCAOB)

  • Board of Directors

  • Audit Committee

  • The 4 Types of Audit Opinions

  • Going Concern

  • Internal Auditor vs External Auditor

  • The Role of an Analyst

  • Sell-side Analyst vs Buy-side Analyst

The Basic Accounting Equation & Journal Entries

  • The Basic Accounting Equation

  • Debits and Credits

  • Double Entry Accounting

  • Journal Entry Format

  • Recording a Journal Entry

  • Practice with Journal Entries

  • Cash vs Accrual Accounting

  • T accounts

  • Preparing a Trial Balance

  • Introduction to Adjusting Journal Entries (AJE’s)

  • Prepayment AJE’s

  • Accrual AJE’s

  • Nominal vs. Real Accounts

  • Post-closing Trial Balance

  • Closing Entries

  • Reversing a Journal Entry

  • The Accounting Cycle

  • The Operating Cycle

  • Cash Conversion Cycle

The Income Statement

  • How to Calculate Sales Growth

  • Sales vs. Profit

  • Income Statement Overview: Part 1

  • Revenue

  • Expenses

  • Gains and Losses

  • Earnings

  • Single-step Income Statement

  • Irregular Items

  • Discontinued Operations

  • Restructuring Charges

  • Intraperiod Tax Allocation

  • Multi-step Income Statement

  • Earnings per Share (EPS) Explained

  • How to Calculate EPS

  • How to Calculate EPS for Amazon

  • Income Statement Overview: Part 2

  • Purpose of the Income Statement

  • Limitations of the Income Statement

  • Calculating Gross Profit (aka Gross Margin)

  • Comprehensive Income

  • Other Comprehensive Income (OCI)

  • Types of OCI

  • Accumulated OCI

  • Earnings Quality

  • Earnings Management

The Balance Sheet

  • Assets

  • Liabilities

  • Stockholders’ Equity

  • Introduction to the Balance Sheet

  • Example of a Balance Sheet

  • Current Assets

  • Short-term Investments

  • Noncurrent Assets

  • Long-term Investments

  • Current Liabilities

  • Long-term Liabilities

  • Comparative Balance Sheet

  • Connection between Balance Sheet & Income Statement

  • Usefulness of the Balance Sheet

  • Limitations of the Balance Sheet

  • Balance Sheet vs. Income Statement

Time Value of Money

  • Time Value of Money

  • Explaining Effective Annual Rate of Interest

  • Calculating Effective Annual Rate of Interest

  • Future Value of a Single Amount

  • Present Value of a Single Cash Flow

  • Future Value of an Annuity

  • Present Value of an Annuity

  • Future Value of an Annuity Due

  • Future Value of a Growing Annuity

  • Present Value of a Perpetuity

  • Present Value of a Growing Perpetuity

Cash, Receivables, & Prepaid Expenses

  • Cash and Cash Equivalents

  • Receivables

  • Accounts Receivable

  • Gross Sales vs. Net Sales

  • Sales Discounts

  • Sales Returns and Allowances

  • Percentage-of-Sales Method for Estimating Bad Debts

  • Journal Entry for Bad Debt Recovery

  • Collecting Accounts Receivable Already Written Off

  • Aging Method for Estimating Uncollectible Accounts

  • Why Receivables Might Grow Faster than Sales

  • Prepaid Expenses

  • Prepaid Insurance

  • Journal Entry for Prepaid Insurance

  • Prepaid Rent

Inventory

  • Inventory Defined

  • Perpetual Inventory

  • Periodic Inventory

  • Periodic vs Perpetual Inventory

  • Average Cost Inventory Method

  • Average Cost Periodic Inventory Method

  • Average Cost Perpetual Inventory Method

  • FIFO Inventory Method

  • FIFO Periodic Inventory Method

  • FIFO Perpetual Inventory Method

  • LIFO Inventory Method

  • LIFO Periodic Inventory Method

  • LIFO Perpetual Inventory Method

  • LIFO Liquidation

  • Dollar Value LIFO

  • LIFO Reserve (LIFO Effect)

  • Advantages of LIFO

  • Disadvantages of LIFO

  • Retail Inventory Method

  • Calculating Net Realizable Value of Inventory

  • Lower of Cost or Market Rule for Valuing Inventory

  • Lower of Cost or Market Rule Example

  • Lower of Cost or Net Realizable Value

  • Inventory Writedown Journal Entry

  • Inventory Writedown Allowance Method

  • Recording Inventory at Net Realizable Value

  • Inventory: IFRS vs. U.S. GAAP

Property, Plant, & Equipment

  • Property, Plant, and Equipment Defined

  • Capitalization of PP&E Acquisition Costs

  • Capitalization of PP&E Subsequent Costs

  • Depreciation

  • Straight Line Depreciation Method

  • Double Declining Balance Depreciation Method

  • Sum of the Years’ Digits

  • Units of Production Depreciation Method

  • Journal Entry for Depreciation

  • Depreciation Expense vs. Accumulated Depreciation

  • Fixed Asset Disposal

  • Impairment of PP&E

  • Nonmonetary Exchange

  • Nonmonetary Exchange that Lacks Commercial Substance

  • Nonmonetary Exchange with a Loss

  • Depletion

Intangible Assets

  • Intangible Assets

  • Goodwill in Accounting, Defined and Explained

  • Goodwill Impairment Single Step Test ASU 2017-04

Current Liabilities

  • Accounts Payable

  • Unearned Revenue

  • Contingent Liabilities

  • Accounting for Warranty Expense

  • Accounting for Gift Cards

  • Accounting for Premiums and Coupons

  • Asset Retirement Obligation

Long-term Liabilities

  • Types of Bonds

  • Debt Covenants

  • Bonds Issued at Par

  • Amortizing a Bond Discount

  • Accounting for Premiums and Coupons

  • How to Account for Convertible Debt (U.S. GAAP)

  • How to Account for Convertible Debt (IFRS)

Stockholders’ Equity

  • Capital Stock (Common Stock and Preferred Stock)

  • Additional Paid in Capital

  • Common Stock

  • Common Stock vs. Additional Paid-in Capital

  • Preferred Stock

  • Treasury Stock

  • Explaining Dividends

  • Liquidating Dividend

  • Journal Entry for Dividends

  • How to Calculate the Dividend Yield

  • Stock Split

  • Why Firms Buy Back their own Stock

  • Retained Earnings

  • Retained Earnings vs. Net Income

  • Retained Earnings Example

  • Things that affect Retained Earnings

  • T-Account for Retained Earnings

  • Retained Earnings Formula

  • Restrictions of Retained Earnings

  • The Statement of Retained Earnings

  • Can Stockholders’ Equity be Negative?

  • Diluted EPS using the If-Converted Method

  • Diluted EPS using the Treasury Stock Method

  • Diluted EPS using the Treasury Stock Method (shortcut approach)

  • Market Capitalization

Investments

  • Accounting for Investments (Equity and Debt Securities)

  • Calculating the Issue Price of a Bond (Annual Interest Payments)

  • Calculating the Issue Price of a Bond (Semiannual Interest Payments)

  • Calculating the Issue Price of a Bond (Quarterly Interest Payments)

  • Determining the Carrying Value of Bonds

  • Amortized Cost of a Held to Maturity Investment

  • Held-to-Maturity Debt Securities

  • Debt Securities- Trading

  • Available-for-Sale Debt Securities

  • Unrealized Gains and Losses on Available for Sale Debt Investments

  • Selling an Available for Sale Investment

  • Impairment of Available-for-Sale Securities

  • Investments in Equity Securities

  • Trading Securities

  • Equity Investments at Cost: The Practicability Exception

  • Fair Value Method for Equity Investments

  • Fair Value Hierarchy (Level 1, Level 2, Level 3)

  • The Fair Value Option for Financial Instruments

  • Equity Method of Accounting for Investments

  • Equity Method vs. Fair Value Method

  • Consolidated Balance Sheet

  • Consolidated Balance Sheet with Noncontrolling Interest

  • Noncontrolling Interest- Balance Sheet

  • Noncontrolling Interest- Income Statement

Revenue Recognition

  • Percentage of Completion Method

  • Completed Contract Method

  • Percentage of Completion vs. Completed Contract Method

  • 5 Steps of Revenue Recognition (ASU 2014-09)

  • Installment Sales Method in Accounting

  • Cost Recovery Method

  • Accounting for Bundled Services

  • Accounting for Franchise Fees

Income Taxes

  • Book Income vs. Tax Income

  • Temporary Tax Differences

  • Permanent Tax Differences

  • Temporary vs. Permanent Differences

  • Deferred Tax Asset

  • Deferred Tax Liability

  • Income Tax Expense vs. Income Tax Payable

  • Net Operating Loss (NOL) Carrybacks and Carryforwards

  • Deferred Tax Asset Valuation Allowance

  • Reversing a Deferred Tax Asset Valuation Allowance

  • Accounting for Uncertain Tax Positions

  • Effective Tax Rate

Pensions

  • Defined Benefit vs. Defined Contribution Pension Plan

  • Calculating Pension Expense for a Defined Contribution Plan

  • Calculating Pension Expense for a Defined Benefit Plan

  • 5 Components of Pension Expense for a Defined Benefit Plan

  • PBO vs. ABO vs. VBO

  • Calculating the Projected Benefit Obligation (PBO)

  • Calculating the Change in Plan Assets

  • Prior Service Cost

  • Calculating Corridor Amortization

  • Recording Pension Expense (Journal Entry)

  • Calculating the Funded Status of Pension Plan

Leases

  • Lease Accounting Overview

  • The 5 Lease Classification Tests

  • Finance Lease (Lessee)

  • Operating Lease (Lessee)

  • Finance vs. Operating Lease (Lessee)

  • Sales-type Lease (Lessor)

  • Operating Lease (Lessor)

  • Sales-type vs. Operating Lease (Lessor)

  • Direct Financing Lease (Lessor)

  • Guaranteed Residual Value (Lessee)

  • Unguaranteed Residual Value (Lessor)

  • Bargain Purchase Option (Lessee)

Statement of Cash Flows

  • Purpose of the Statement of Cash Flows (SCF)

  • Indirect Method of SCF

  • Cash Flow from Operations

  • Cash Flow from Investing

  • Cash Flow from Financing Activities

  • SCF: Disposal of Fixed Assets

  • SCF: How to Calculate Dividends

  • SCF: Accounting for Equity Method Investment

  • Statement of Cash Flows Formula

  • Direct Method of SCF

  • Direct vs. Indirect Method

  • Cash Received from Customers (Direct Method, SCF)

  • Cash Paid to Suppliers (Direct Method, SCF)

  • Cash Paid to Employees (Direct Method, SCF)

  • Cash Paid for Interest (Direct Method, SCF)

  • Cash Paid for Income Taxes (Direct Method, SCF)

Financial Ratios

  • ROA (Return on Assets)

  • Net Profit Margin

  • Asset Turnover

  • Decomposing ROA (Return on Assets)

  • Gross Profit Margin Ratio

  • Current Ratio

  • Quick Ratio (Acid Test Ratio)

  • Current Cash Debt Coverage Ratio

  • Cash Debt Coverage Ratio

  • Net Working Capital

  • Inventory Turnover

  • Debt to Equity Ratio

  • Dividend Payout Ratio

  • Market to Book Ratio

  • Altman Z Score

  • Accounts Receivable Turnover Ratio

  • Days Sales Outstanding

  • Accounts Payable Turnover Ratio

  • Days Payable Outstanding

  • Days to Sell Inventory

  • Price-Earnings (P/E) Ratio

  • Cash Flow to Capital Expenditures Ratio

  • Operating Cash Flow Ratio

  • Fixed Asset Turnover Ratio

  • Debt Ratio

  • Cash Ratio

  • Times Interest Earned (Interest Coverage Ratio)

  • The Equity Multiplier

Segment Reporting

  • Introduction to Segment Reporting

  • Determining Reportable Segments

  • Example of Segment Reporting (Walmart)

  • Segment Reporting Disclosures

  • Segment Reporting: IFRS vs. U.S. GAAP

Accounting Changes

  • The 3 Types of Accounting Changes

  • Change in Accounting Principle

  • Change in Reporting Entity

  • Change in Accounting Estimate

  • Accounting Errors

Foreign Currency Transactions

  • Foreign Exchange Gain or Loss

  • Foreign Exchange Gain or Loss (advanced)

  • Foreign Currency Borrowing

Payroll

  • Payroll Accounting

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