Financial Accounting: An Integrated Statements Approach, 2nd Edition

vii

Bank Reconciliation 322

Special-Purpose Cash Funds 325

Financial Statement Reporting of Cash 326

Cash Ratios 327

Ratio of Cash Flow to Net Income 327, Ratio of Cash to

Monthly Cash Expenses 328

Summary of Learning Goals 329

Glossary 330

Chapter 8

Receivables 354

Classification of Receivables 356

Accounts Receivable 356, Notes Receivable 356, Other

Receivables 357

Uncollectible Receivables 357

Direct Write-Off Method for Uncollectible Accounts 358

Allowance Method for Uncollectible Accounts 358

Write-Offs to the Allowance Account 359, Estimating

Uncollectibles 360

Comparing Direct Write-Off and Allowance Methods 364

Notes Receivable 365

Characteristics of Notes Receivable 365, Accounting for

Notes Receivable 366

Reporting Receivables on the Balance Sheet 367

Managing Accounts Receivable 368

Screening Customers 369, Determining Credit Terms 369,

Monitoring Collections 370

Accounts Receivable Turnover and Days’ Sales In

Receivables 370

Summary of Learning Goals 372

Glossary 373

Chapter 9

Fixed Assets and Intangible Assets 398

Nature of Fixed Assets 400

Classifying Costs 400, The Cost of Fixed Assets 401, Capital

and Revenue Expenditures 403

Accounting for Depreciation 404

Factors in Computing Depreciation Expense 405, Straight-

Line Method 406, Units-of-Production Method 407, Double-

Declining-Balance Method 407, Comparing Depreciation

Methods 408, Depreciation for Federal Income Tax 409,

Revising Depreciation Estimates 409

Fixed Asset Disposals 410

Discarding Fixed Assets 411, Selling Fixed Assets 412

Intangible Assets 412

Patents 413, Copyrights and Trademarks 413,

Goodwill 414

Reporting Fixed Assets and Intangible Assets 415

Analyzing Fixed Assets 416

Operational Utilization Analysis 417, Financial Utilization

Analysis 418

Summary of Learning Goals 419

Glossary 420

Chapter 10

Liabilities 440

Current Liabilities 442

Accounts Payable 442, Notes Payable 442, Payroll

Liabilities 444

Long-Term Liabilities 447

Present Value Concepts 448, Bonds Issued at Face Value

451, Bonds Issued at Discount 454, Bond Discount

Amortization 455, Bonds Issued at a Premium 456,

Amortizing a Bond Premium 457, Bond Redemption 457,

Zero-Coupon Bonds 458

Deferred Liabilities 459

Deferred Revenue 459, Deferred Expense 459

Contingent Liabilities 461

Reporting Liabilities 462

Current Maturities of Long-Term Debt 462, Long-Term Liability

Disclosures 462, Contingent Liabilities 463

Liquidity Analysis 463

Current Liquidity Analysis 463, Long-Term Liability

Analysis 465

Appendix: Effective Interest Rate Method of

Amortization 467

Amortization of Discount by the Interest Method 468,

Amortization of Premium by the Interest Method 469

Summary of Learning Goals 470

Glossary 471