Origin of Managerial Accounting
Introduction to Managerial Accounting
Financial vs. Managerial Accounting
Cost Objects
Direct vs. Indirect Costs
Product Costs
Period Costs
3 Types of Manufacturing Costs
Direct Materials
Direct Labor
Manufacturing Overhead
Prime & Conversion Costs
Raw Materials Inventory
Work-in-Process Inventory
Finished Goods Inventory
Flow of Costs for a Manufacturer
Nonmanufacturing Costs (SG&A)
Cost of Goods Manufactured
Opportunity Cost
Fixed Costs
Cost of Goods Sold
Cost of Goods Sold Example
Journal Entry for Cost of Goods Sold
Cost of Revenue
Sunk Costs
Variable Costs
Relevant Range
Cost Drivers
Job-Order Costing
Job-Order Costing Example
Predetermined Overhead Rate
Applying Manufacturing Overhead
Actual vs. Applied Overhead
Underapplied or Overapplied MOH
3 Types of Inventory
Prorate Over/Underapplied Overhead
Closing Over/Underapplied Overhead
Effects of Over/Underapplied Overhead
Adjusted Allocation-Rate Approach
Job-Order Costing Journal Entries
Underapplied MOH Journal Entries
Job-Order Costing for Services
Departmental Overhead Rates
3 Ways to Allocate Support Costs
Direct Method
Step-down Method
Reciprocal Method
Reciprocal Method, using Linear Equations
Single-rate Method
Dual-rate Method
Allocating Support Costs using Practical Capacity
Joint Product Costs & Splitoff Point
Relative Sales Value Method
Physical Measure Method
NRV Method
Constant Gross Margin NRV Method
Accounting for Byproducts
Byproduct JE’s: Production Method
Byproduct JE’s: Sales Method
Sales Method vs. Production Method
Process Costing
Job-Order vs Process Costing
Cost Per Equivalent Unit (Weighted Average Method)
Cost Per Equivalent Unit Example (Weighted Average Method)
Process Costing Example (Weighted Average Method)
Cost Per Equivalent Unit (FIFO Method, Part 1)
Cost Per Equivalent Unit (FIFO Method, Part 2)
Weighted Average vs. FIFO Method
Process Costing with Sequential Production
Process Costing Journal Entries
Basics of Operation Costing
ABC vs. Traditional Costing
Activity Measures for ABC
ABC Part 1: Cost Pools and 1st Stage Allocation
ABC Part 2: 2nd Stage Allocation
ABC Full Length Example
Customer Profitability Analysis using ABC
Disadvantages of ABC
Mixed Costs
Step Variable Costs
Discretionary vs Committed Fixed Costs
The High Low Method
High-low Method Example
Least Squares Regression Method
Contribution Format Income Statement
Contribution Margin
Contribution Margin Ratio
Calculating Break Even Point
Break-even Point (in units)
Break-even Point (in sales dollars)
Target Profit
Margin of Safety
Margin of Safety Percentage Example
Degree of Operating Leverage
Degree of Operating Leverage Example
Multiproduct Break-even Point
Absorption Costing
Variable Costing
Absorption vs. Variable Costing
Absorption Costing Example
Variable Costing Example
Absorption Costing Profit vs. Variable Costing Profit
Advantages of Variable Costing
Disadvantages of Variable Costing
Introduction to Budgeting
Participative vs. Traditional Budgets
Rolling Budget
Zero-based Budgeting
Master Budget
Sales Budget
Schedule of Expected Cash Collections
Production Budget
Direct Materials Budget
Direct Labor Budget
Manufacturing Overhead Budget
Ending Inventory Budget
SG&A Budget
Cash Budget
Merchandise Purchases Budget
Advantages of Budgeting
Disadvantages of Budgeting
Flexible Budgeting
Revenue and Spending Variance Analysis
Calculating a Revenue Variance
Calculating a Spending Variance
Advantages of Flexible Budgeting
Disadvantages of Flexible Budgeting
Standard Costs and Variance Analysis
Materials Price Variance
Materials Quantity Variance
Materials Quantity Variance (purchases ≠amount used)
Direct Materials Variance Analysis
Labor Rate Variance
Labor Efficiency Variance
Direct Labor Variance Analysis
Variable Overhead Spending Variance
Variable Overhead Efficiency Variance
Fixed Overhead Spending Variance
Fixed Overhead Production Volume Variance
Advantages of Standard Costing
Disadvantages of Standard Costing
Time Value of Money
Present Value of a Single Amount
Present Value of an Ordinary Annuity
Present Value of a Perpetuity
Present Value of a Growing Annuity
Present Value of an Annuity Due
Ordinary Annuity vs. Annuity Due
Net Present Value (NPV)
NPV Example
Internal Rate of Return
IRR of a Single Cash Flow
Calculating IRR (using trial and error)
Payback Period Method Example
Discounted Payback Period Method
NPV vs. IRR
Return on Investment (ROI)
Residual Income
ROI vs. Residual Income
Economic Value Added (EVA)
EVA Example
Weighted Average Cost of Capital (WACC)
Cost to Acquire a Customer
Churn Rate
Lifetime Value of a Customer
Lifetime Value of a Customer vs. Customer Acquisition Cost
Sales Per Square Foot
Same-store Sales
Daily Active Users
Balanced Scorecard
Learning and Growth Perspective
Internal Process Perspective
Customer Perspective
Financial Perspective
Strategy Maps
Decentralization
Advantages of Decentralization
Disadvantages of Decentralization
Responsibility Accounting
Responsibility Centers
Cost Center
Revenue Center
Profit Center
Investment Center
3 Ways to Allocate Common Costs
Stand-alone Cost Allocation
Incremental Cost Allocation
Shapley Value Cost Allocation
Relevant Costs
Make or Buy Decision
Make or Buy Decision (with opportunity cost)
Sell or Process Further Decision
Deciding whether to Drop a Product Line
Deciding whether to Drop a Product Line (shortcut)
Ordering Costs
Carrying Costs
Economic Order Quantity Example
Reorder Point
Material Requirements Planning
Just In Time (JIT) Inventory System
Enterprise Resource Planning (ERP) System
Transfer Pricing
Market-based Transfer Price
Cost-based Transfer Price
Negotiated Transfer Price
Full Cost Transfer Pricing
Transfer Pricing (with Excess Capacity)
Transfer Pricing (No Excess Capacity)
Dual Rate Transfer Pricing
Transfer Pricing and Tax Avoidance
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
Debits and Credits
Double Entry Accounting
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
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
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
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
Connection between Balance Sheet & Income Statement
Usefulness of the Balance Sheet
Limitations of the Balance Sheet
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 Growing Perpetuity
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
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 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
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
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
Goodwill in Accounting, Defined and Explained
Goodwill Impairment Single Step Test ASU 2017-04
Accounts Payable
Unearned Revenue
Contingent Liabilities
Accounting for Warranty Expense
Accounting for Premiums and Coupons
Asset Retirement Obligation
Types of Bonds
Debt Covenants
Bonds Issued at Par
Amortizing a Bond Discount
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
Stock Split
Why Firms Buy Back their own Stock
Retained Earnings
Retained Earnings vs. Net Income
Retained Earnings Example
Things that affect 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
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
Available-for-Sale Equity Securities
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
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
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
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
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)
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)
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
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