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Accounting Review for General Accounting and Consolidation Exam

Autor:   •  February 26, 2016  •  Course Note  •  1,731 Words (7 Pages)  •  148 Views

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Remarks for the Accounting General Exam:

CHAPTER 4:

  • Unearned Revenue is a liability
  • Depreciation è una Deferred Expense
  • Accumulated Depreciation è un XA

CHAPTER 6:

  • Allowance for Doubtful Accounts is a XA
  • Sales returns and allowances is a XR
  • Sales discounts is a XR

CHAPTER 9: Notes Payable

  • The notes payable at a future date, are registered at their present value.
  • The interest is calculated on the book value at the date on which the financial year ends
  • Debit Interest Expense (+E, - SE)
  • Credit Notes Payable (+L)
  • Estimate liabilities:
  • Probable:
  • Subject to estimate: Recorded as a liability + disclosure note
  • Not subject to estimate: Disclosed in Note
  • Reasonably possible:
  • Subject to estimate: Disclosed in Note
  • Not subject to estimate: disclosed in note
  • Remote: disclosure is not required

CHAPTER 10: Bonds

Bonds are recorded at their Present Value, see general rule for liabilities in the chapter above

  • DISCOUNT BONDS
  • Journal entry at issue date

CASH(+A)                                 XXX

BOND DISCOUNT (+XL, -L)         X

BONDS PAYABLE (+L)                         XXXX

Cash + Bond Discount = Bond Payable

  • Payment of Interest / Amortization of discount

  1. STRAIGHT LINE

INTEREST EXP. (+E)                                         XXX

                        BOND DISCOUNT (-XL, +L)                         X

                        CASH (-A)                                                 XX

Bond Discount = Total Bond Discount / Y x n

Y= years

n= nº of payments per year

Cash = (N x c)/n

c= stated interest rate

N= Principal

Cash + Bond Discount= Interest Expense

  1. EFFECTIVE INTEREST AMORTIZATION

INTEREST EXPENSE (+E)                                 XXX

                        BOND DISCOUNT (-XL, +L)                                X

                        CASH (-A)                                                        XX

I.E.= U.B. x i/n

U.B. = Unpaid Balance = Book Value @ Present Value – Paid Balance

i= market rate

Cash = (N x c)/n

...

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