Topics Explained

The following explanations of accounting topics are recognized for their amazing clarity by people all over the world.

Financial Accounting

The topics below are in alphabetical order.
Click Here for our recommended sequence.

Accounting Basics: Learn accounting principles, introduction to financial statements, debits and credits.

Accounting Degree: Learn about selecting the right college for earning your accounting degree, the CPA Exam, and accounting job opportunities held by people with accounting degrees.

Accounting Equation: Learn how transactions affect the accounting equation, balance sheet, and income statement. See the connection between the accounting equation and debits and credits.

Accounting Principles: Learn the basic accounting principles (matching, cost, conservatism, etc.). Understand their impact on the financial statements.

Adjusting Entries: Accruals and deferrals necessary for financial reporting under the accrual basis of accounting.

Balance Sheet: Learn the proper reporting of assets, liabilities, owner's equity. Includes current vs long-term classifications.

Bank Reconciliation: Use of outstanding checks, deposits in transit, bank charges, and NSF checks to be certain the cash balance agrees with the bank statement balance.

Bookkeeping: Introduction to double entry bookkeeping, debits and credits, trial balance, and chart of accounts.

Cash Flow Statement: Tips for learning indirect method, format, illustration of transactions' effect on the statement, relationship to income statement and balance sheet.

Chart of Accounts: Sample charts of accounts with many accounts and account descriptions.

Debits and Credits: Learn accounting's double entry system. Tips for learning debits and credits, T-accounts, and sample journal entries are provided.

Depreciation: Straight-line, journal entries, use of estimates, accelerated depreciation.

Financial Accounting: Learn about financial reporting and financial statements. Introduction to the role of FASB and SEC.

Financial Ratios: Common-size balance sheet and income statement, current ratio, quick ratio, accounts receivable and inventory turnover ratios, profitability ratios.

Income Statement: Revenues, gains, expenses, losses, formats, reporting unusual items.

Inventory and Cost of Goods Sold: Learn accounting's cost flow assumptions: periodic FIFO, LIFO, weighted average. Perpetual FIFO, LIFO, moving average. Estimating inventory methods.

Lower of Cost or Market: Conservatism, losses, replacement cost, net realizable value, normal profit.

Payroll Accounting: Salaries, wages, overtime pay, Social Security and Medicare taxes (FICA), unemployment taxes, fringe benefits, sample journal entries.

Stockholders' Equity: Corporations, common stock, paid-in capital, retained earnings, treasury stock, stock splits, stock dividends, preferred stock, book value.

Present Value of an Ordinary Annuity: Time value of money and compounding of interest of a series of equal amounts at equal time intervals. Illustrations for calculating the present value of an ordinary annuity, the amount of each payment, the number of payments, or the interest rate. Amortization of interest/discount.

Present Value of a Single Amount: Time value of money and compounding of interest of a single amount. Illustrations for calculating the present value of a future cash amount, unknown interest rate, or length of time. Amortization of discount.

Managerial & Cost Accounting

The topics below are in alphabetical order.
Click Here for our recommended sequence.

Activity Based Costing: Comparison of Activity Based Costing (ABC) to traditional allocation of manufacturing overhead.

Break-even Point: Fixed and variable expenses, contribution margin, and desired profit.

Evaluating Business Investments: Capital expenditures, rate of return, payback, net present value, internal rate of return.

Improving Profits: Relevant amounts for analyzing, business stories to illustrate profit improvement.

Manufacturing Overhead: Examples of manufacturing overhead; allocation of overhead via direct labor, and via departmental machine hours.

Nonmanufacturing Overhead: Examples of selling, general, and administrative costs. Assigning nonmanufacturing costs to products and customers for pricing and other decisions.

Standard Costing: Direct materials price and usage variances, direct labor rate and efficiency variances, manufacturing overhead volume, efficiency, spending, and budget variances. Disposing of variance amounts.