| GAAP,
continued |
| expense
recognition, see matching |
| |
principle; classification,
valuation, and timing |
|
liability recognition
and
disclosure, 786 |
|
merchandise inventory, 702,
723 |
|
property, plant, and equipment,
743, 746, 749, 760
|
|
quality of earnings
and, 879 |
|
revenue recognition, 14–15, |
|
procedure, 602–603,
605–607 |
|
see
also classification, valuation,
and timing |
|
weaknesses and
limitations, 675,
723, 768, 877–879 |
| Gains and losses,
254 |
|
asset disposals, 403, 754–758 |
|
reporting of, 403 |
General journal
used with special
journals, 540, 542 |
| General ledger
|
|
controlling and subsidiary
accounts, 515–519 |
|
posting references, 530–531 |
|
posting to, 530 |
| Global Crossing,
880 |
| Goodwill, 765 |
| Gross pay, 796–797 |
| Gross profit (gross
margin), 379 |
|
analysis with, 862, 872 |
|
calculation, 320, 399 |
|
illustrated, 358, 399, 401 |
| Gross profit method
for estimating inventory, 720–721 |
Gross profit ratio
(percentage), 425,
862, 883 |
| Group asset purchase,
744 |
| H |
| Health insurance,
807 |
| Horizontal analysis
of financial |
|
statements, 845–846 |
| Hot checks, 600 |
| I |
| Impaired assets,
760–761 |
| Imprest petty
cash system, 626 |
| Income |
|
from operations, 403, |
|
see also
corporate income
statement, Volume 1 |
|
net, see net income |
| Income smoothing,
873 |
| Income statement |
|
common-size, 849 |
|
|
expense classification,
401 |
|
horizontal and
vertical analysis, 845–948 |
|
merchandising business, 401,
404, 846 |
|
multiple-step, 401, 846 |
|
service business (unclassified),
234 |
|
single-step, 404 |
|
worksheet source of, 232–234 |
| Income summary
account, 261–265, 268–269 |
| Income tax, corporate,
150 |
| Independent contractors,
792 |
| Industry data
sources, 849 |
| Intangible assets,
105, 765– 767 |
| Integrated accounting
software, 514, 548–
550, 553 |
| Interest |
|
accruing, 130, 133, 146, 149 |
|
calculating simple interest,
681– 682 |
|
construction period, 743 |
|
coverage ratios, 858 |
|
reporting on income statement,
403 |
| Internal control,
513 |
|
accounts receivable, 637,
679 |
|
basic principles, summary
of, 640 |
|
cash (summarized), 591–592, |
|
cash payments, 638 |
|
cash receipts, 536–537,
542 |
|
computerized systems, 547,
639 |
|
limitations, 592 |
|
merchandise inventory, 722–723 |
|
payroll, 793–794, 808,
817–818, 822 |
|
property, plant, and equipment,
761 |
Internal Revenue
Service, 252, 724,
747, 789,
816, 820, 837 |
| Internet, 514,
639 |
| Interim reporting,
6 |
| Inventory, see
merchandise inventory |
| Investing activities,
842 |
| Investments, return
on, 851, 853 |
| Invoice, 366,
452 |
| Invoice price,
341, 364, 452 |
| J |
| Journal |
|
cash receipts, 534–535,
542 |
|
cash payments, 536–537,
542 |
|
combination, 543–544 |
|
general, 520, 542 |
|
purchases, 524–525, 542 |
|
sales, 528–529, 542 |
|
using documents as journals,
546 |
| Journal references,
530–531 |
|
| L |
| Land, 243, 743 |
| Land improvements, 743 |
| Ledger accounts |
|
analyzing, 541 |
|
controlling and
subsidiary, 515–519 |
|
posting references in journals,
530–531 |
|
posting to, 530–531 |
| Leverage, 865 |
| Leaseholds, 765 |
| Leases |
|
capital, 877 |
|
operating, 877 |
| Liabilities |
|
accounts payable, 243 |
|
accrued, 137, 823 |
|
classifications of, 242, 244,
786–788 |
|
contingent, 787, 874–876 |
|
lease liabilities, 877 |
|
notes payable, 243–244 |
|
off-balance sheet, 876–878 |
|
payroll, 812–813, 823 |
|
reporting requirements, 241,
786 |
|
sales tax, 465 |
|
unearned (deferred) revenue,
74–75, 243 |
| LIFO (last-in, first-out) |
|
conformity rule, 724 |
|
liquidation, 716 |
|
manipulation of income, 716 |
|
periodic inventory system,
706 |
|
perpetual inventory system,
713 |
| Liquidity, 242, 851, 882 |
| List price, 341 |
| Loan principal, 681 |
| Lockbox system, 638 |
| Long-term assets, 242–243 |
| Long-term liabilities,
241, 243 |
| Loss reporting, 403 |
| Lower of cost or market, 717 |
| Lump-sum asset
purchase, 744 |
| M |
| MACRS depreciation, 747 |
| Maker, 593 |
Manual accounting
system
compared to computerized
system,
544,
546–548 |
|
journals, 542 |
|
ledgers, 542 |
|
posting procedure, 530–531 |
| Matching principle, 14 |
| Maturity date of note, 682 |
|
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