REVIEW SHEET

FINANCIAL ACCOUNTING
BY CHRISTINE PELLETIER
!
RATIOS

Debt-to-equity Return on Total asset Profit margin Receivable Average

How the cie. finance its assets equity turnover How much profit per $ turnover collection period
Risk assumed because of debt How much sales per $ How much sales per $ of sale
financing of assets of assets
Whether they should expend
Profit 365
Profit Net sales Profit Average net trade ∆ receivable
Liabilities Shareholder’s Average total Net sales
Shareholder’s equity receivable turnover
equity assets

BANK RECONCILIATION

PER BANK PER BOOK

+ deposit in transit + deposit by bank
- outstanding cheque - service charge
+- bank error - NSF cheque
= correct balance +- book error
= correct balance
*Note that 2 most common adjustment are – NSF cheques and + bank charge fees

BAD DEBT

Allowance for bad = amount uncollectible – credit balance for allowance = end balance for allowance
debt account
(Contra-asset account)
+XA, -A

Net value of trade = trade receivable – allowance for doubtful account

receivable

STATEMENT

INCOME FINANCIAL POSITION

Revenue Current Asset Current liabilities
Sales revenue Cash Trade payable
Sales return Trade receivable Dividend payable
Net revenue Inventory Income tax payable
Cost of good sold Note receivable Note payable
*Gross profit Interest receivable Interest payable
Expense Prepaid rent Deferred rent revenue
Wage Total current asset Total current liabilities
Depreciation
Operating expense Non-current asset Shareholder’s equity
Total expense Equipment Common shares
*Operating profit Less accumulated Retained earnings (R.E. – dividend + profit)
depreciation Total shareholder’s equity
Other income/expense Total asset
Rent revenue Total liabilities and shareholder’s equity
Interest income
Interest expense

*Profit before income tax

Income tax expense
*Profit

Earning per share