I- 5 Index
Manufacturing, 4
inventories, 266
Margin analysis, 640, 641
Market, 280
price, 507
rate, 451
Marketable securities, 544
Market-based financial measures, 552
Matching concept, 15, 22
basic accrual accounting concepts
including, 98
Materials inventory, 266
Maturity date, 365
Maturity value, 366
Measures
market-based financial, 552
other analytical, 635
proofs and security, 313
summary of analytical, 651, 652
Medicare, 444
Merchandise
available for sale, 216
cash payments for, 593
inventory, 213, 266
operations, 212
purchased, cost of, 215
shrinkage, 228
sold, cost of, 12, 212, 266, 267
transactions, dual nature of, 228
Merchandisers, inventory classification
for, 266
Merchandising, 4
Merchandising business
financial statements for, 213
statement of cash flows for, 219
Modified Accelerated Cost Recovery
System (MACRS), 409
Monitoring, 313
collections, 370
Mortgage note payable, 115
Mortgage payable, 115
Moving average, 273
Multiple-step income statement, 214N
National Association of Security Dealers
Automated Quotation (NASDAQ),
497
Natural business year, 169
Net income, 13, 15
adjustments to, indirect method, 586
and cash flows from operating activi-
ties, reconciling, 329
ratio of cash flow to, 327
Net loss, 13, 15
Net pay, 444
Net purchases, 215
Net realizable value, 280, 359
Net sales, 212
New York Stock Exchange (NYSE), 497
Noncash investing and financing activi-
ties, 582
No-par stock, 497, 500
Normal balance of an account, 156Notes payable, 11, 442
Notes receivable, 114, 356, 365
accounting for, 366
dishonored, 367
Not-for-profit, 496
NSF checks, 321
Number of days’ sales in inventory,
282, 644
Number of days’ sales in receivables,
371, 642
Number of times interest charges are
earned, 465, 649O
Objectivity concept, 22
Operating activities, 12
cash flows from, 235, 580, 585
direct method of reporting cash flows
from, 595
reconciling net income and cash flows
from, 329
reporting cash flows from, 588
Operating expenses, cash payments for,
594
Operating income, 217
Operating profit analysis, gross profit
and, 233
Operating ratios—JCPenney and Saks
Incorporated, 234
Operational utilization analysis, 417
Operational utilization ratio examples,
417
Operations
discontinued, 541
income from, 217
merchandise, 212
recording a corporation’s first period
of, 56, 62
recording a corporation’s second
period of, 65, 66
separating responsibilities for related,
312
Organizational structure, 310
Other comprehensive income, 508
item, 545
Other expense, 217
Other income, 217
Outstanding stock, 496
Owners’ equity, 17P
Paid-in capital, sources of, 496
Par, 497
Parent company, 549
Partnership, 5
Patents, 413
Payee, 365
Payroll, 444
cycle, 154
liabilities, 444
recording, 444
Payroll taxes
liability for employer, 445
recording and paying, 446Periodic inventory method, 216
Periodic inventory system, inventory cost-
ing methods under, 274
Permanent accounts, 169
Perpetual inventory
account (Fifo) entries, 272
account (Lifo) entries, 273
method, 216
Perpetual inventory system
computerized, 273
inventory costing methods under, 271
Personnel
competent, 311
policies, 310
Petty cash fund, 325
Physical flow, 271
Physical inventory, 230, 268
Plant assets, 400
Post-closing trial balance, 171, 172
Posting, 160
a journal entry, 161
Preferred stock, 498
Premium, 457, 499
amortization of by the interest
method, 469
bonds issued at, 456
on stock, 499
Premium-price emphasis, 7
Prepaid expenses, 12, 101
Prepaid insurance, 107
Present value, 448
concepts, 448
of $1, 448, 449
of a series of payments to be
received in the future, 449
of a stream of cash receipts, 450
of an amount to be received in the
future, 448
of an annuity of $1, 451
Price-book ratio, 554
Price-earnings (P/E) ratio, 552, 651
for eBay and the Standard & Poor’s
500 index, 553
Principal, 447
Proceeds, 443
Profit margin, 640
Profitability analysis, 636
Profits, 6
gross, 212
illusory, 277
inventory, 277
Property, plant, and equipment (PP&E),
400, 416
Proprietorship, 5
Public Company Accounting Oversight
Board (PCAOB), 25
Publicly held companies, 306
Purchase return or allowance, 215, 225
Purchase transactions, 224
Purchases discounts, 215, 225
Purchasing cycle, 154Q
Quick assets, 464, 648