Accounting Workbook For Dummies

Balance the books, learn important accounting concepts, and master the basics  Accounting Workbook For Dummies is for business bookkeepers and accountants, who need a refresher on the subject, as well as students taking their first accounting class. It’s a comprehensive study guide that can help you improve your accounting skills and lay the foundation for further advancement.   Whether you’re trying to get certified and become an accountant, or own a small business and need a little help balancing your books, this hands-on guide provides the learning and helpful practice you need.   The third edition of Accounting For Dummies contains guidance on incorporating principles to adhere to the Sarbanes-Oxley Act, reading financial reports, generating income statements and balance sheets, and establishing budgets. Accounting Workbook For Dummies provides you with real-world exercises to see these principals in action, although you don’t need to have read Accounting For Dummies.   Accounting Workbook For Dummies focuses on business accounting, explains how business transactions are recorded in the accounts of a business and the financial statements that are prepared for a business to report its profit and loss, financial condition, and cash flows. It also shows you how business managers use accounting information for decision making.  The book’s four parts cover topics like recordkeeping basics, financial statements, accounting for business managers, and investment accounting. You’ll learn to:  Record transactions, track costs, and manage accounts  Open and close bookkeeping cycles  Analyze business performance and profit  Choose the right accounting method  Master investment accounting fundamentals  Understand manufacturing cost accounting  With your own copy of Accounting Workbook For Dummies, you can learn how to do all of that, find out what you need to know about financial statements, get tips for management accounting, and more. 

Table of Contents:
Introduction 1 About This Book 1 Foolish Assumptions 2 How This Book Is Organized 2 Part I: Business Accounting Basics 3 Part II: Preparing Financial Statements 3 Part III: Managerial, Manufacturing, and Capital Accounting 3 Part IV: The Part of Tens 3 Icons Used In This Book 3 Where to Go from Here 4 Part I: Business Accounting Basics 5 Chapter 1: Elements of Business Accounting 7 Keeping the Accounting Equation in Balance 7 Distinguishing Between Cash- and Accrual-Basis Accounting 10 Summarizing Profit Activities in the Income (Profit & Loss) Statement 13 Assembling a Balance Sheet 15 Partitioning the Statement of Cash Flows 17 Tracing How Dishonest Accounting Distorts Financial Statements 19 Answers to Problems on Elements of Business Accounting 21 Chapter 2: Financial Effects of Transactions 27 Classifying Business Transactions 27 Seeing Both Sides of Business Transactions 30 Concentrating on Sales 33 Concentrating on Expenses 36 Determining the Composite Effect of Profit 38 Answers to Problems on Financial Effects of Transactions 42 Chapter 3: Getting Started in the Bookkeeping Cycle 47 Constructing the Chart of Accounts 48 Distinguishing Real and Nominal Accounts 50 Knowing Your Debits from Your Credits 53 Making Original Journal Entries 56 Recording Revenue and Income 58 Recording Expenses and Losses 61 Recording Set-Up and Follow-Up Transactions for Revenue and Expenses 64 Recording Investing and Financing Transactions 66 Answers to Problems on the Bookkeeping Cycle 68 Chapter 4: The Bookkeeping Cycle: Adjusting and Closing Entries 75 Getting Accurate with Adjusting Entries 75 Breaking Down the End-of-Year Adjusting Entries 78 Recording depreciation expense 78 Recording amortization expense 81 Recording other adjusting entries 82 Closing the Books on the Year 85 Instituting Internal Controls 88 Answers to Problems on the Bookkeeping Cycle 90 Part II: Preparing Financial Statements 97 Chapter 5: The Effects and Reporting of Profit 99 Understanding the Nature of Profit 99 Choosing the Income Statement Format 102 Deciding on Disclosure in the Income Statement 103 Examining How Sales and Expenses Change Assets and Liabilities 105 Summing Up the Manifold Effects of Profit 109 Answers to Problems on the Effects and Reporting of Profit 113 Chapter 6: Reporting Financial Condition in the Balance Sheet 119 Getting Started on the Balance Sheet 119 Building a Balance Sheet 122 Fleshing Out the Balance Sheet 125 Clarifying the Values of Assets in Balance Sheets 130 Using the Balance Sheet in Business Valuation 133 Answers to Problems on Reporting Financial Condition in the Balance Sheet 135 Chapter 7: Coupling the Income Statement and Balance Sheet 143 Rejoining the Income Statement and Balance Sheet 143 Filling in Key Pieces of the Balance Sheet from the Income Statement 146 Putting Fixed Assets in the Picture 151 Completing the Balance Sheet with Debt and Equity 152 Answers to Problems on Coupling the Income Statement and Balance Sheet 155 Chapter 8: Reporting Cash Flows and Changes in Owners’ Equity 159 Figuring Profit from the Balance Sheet 159 Reporting the Statement of Changes in Stockholders’ Equity 162 Determining Cash Effect from Making Profit 164 Presenting the Statement of Cash Flows 166 Reporting Cash Flows 167 Connecting Balance Sheet Changes with Cash Flows 168 Answers for Problems on Reporting Cash Flows and Changes in Owners’ Equity 172 Chapter 9: Choosing Accounting Methods 177 Getting Off to a Good Start 177 Determining Whether Products Are Unique or Fungible 181 Contrasting Cost of Goods Sold Expense Methods (for Fungible Products) 181 Averaging things out 183 Going with the flow: The FIFO method 185 Going against the flow: The LIFO method 186 Appreciating Depreciation Methods 188 Timing Bad Debts Expense 190 Answers to Problems on Choosing Accounting Methods 194 Part III: Managerial, Manufacturing, and Capital Accounting 201 Chapter 10: Analyzing Profit Behavior 203 Mapping Profit for Managers 203 Analyzing Operating Profit 206 Analysis method #1: Contribution margin minus fixed costs 206 Analysis method #2: Excess over breakeven 207 Analysis method #3: Minimizing fixed costs per unit 207 Analyzing Return on Capital 210 Improving Profit Performance 213 Selling more units 213 Improving margin per unit 215 Making Trade-Offs Among Profit Factors 218 Answers to Problems on Analyzing Profit Behavior 220 Chapter 11: Manufacturing Cost Accounting 229 Minding Manufacturing Costs 229 Product costs 230 Period costs 231 Separating period and product costs 231 Taking a Short Tour of Manufacturing Entries 233 Calculating Product Cost: Basic Methods and Problems 237 Connecting fixed manufacturing overhead costs and production capacity 237 Boosting profit by boosting production 239 Calculating Product Cost in Unusual Situations 242 Answers to Problems on Manufacturing Cost Accounting 248 Chapter 12: Figuring Out Interest and Return on Investment 259 Getting Down the Basics of Interest 259 Keeping it simple with simple interest 260 Distinguishing nominal and effective interest rates 262 Discounting loans 264 Lifting the Veil on Compound Interest 266 Borrowing and Investing in Installments 268 Paying off a loan 268 Investing in a retirement account 270 Measuring Return on Investment (ROI) 272 Example 1: Steady income flow; liquidation value equals entry cost 272 Example 2: Substantial cash flows each year 274 Example 3: Zero cash flow until final year 275 Example 4: Irregular cash flows, both positive and negative 276 Example 5: Market value–driven investments 277 Answers to Problems on Interest and Return on Investment 279 Part IV: The Part of Tens 287 Chapter 13: Ten Things You Should Know About Business Financial Statements 289 Rules and Standards Matter 289 Exactitude Would Be Nice, but Estimates Are Key 290 Financial Statements Fit Together Hand in Glove 290 Accrual Basis Is Used to Record Profit, Assets, and Liabilities 291 Cash Flow Differs from Accrual Basis Profit 291 Profit and Balance Sheet Values Can Be and Often Are Manipulated 292 Financial Statements May Be Revised Later to Correct Errors and Fraud 292 Some Asset Values Are Current, but Others May Be Old 293 Financial Statements Leave Interpretation to Readers 293 Financial Statements Tell the Story of a Business, Not Its Individual Shareowners 294 Chapter 14: A Ten-Point Checklist for Management Accountants 295 Designing Internal Accounting Reports 296 Helping Managers Understand Their Accounting Reports 296 Involving Managers in Choosing Accounting Methods 297 Designing Profit Performance Reports for Managers 297 Designing Cash Flow Reports for Managers 298 Designing Management Control Reports 298 Developing Models for Management Decision-Making Analysis 299 Working Closely With Managers in Planning 299 Establishing and Enforcing Internal Controls 299 Keeping Up- to-Date on Accounting, Financial Reporting, and Tax Changes 300 Index 301

About the Author :
John A. Tracy is a former accountant and professor of accounting. He is also the author of Accounting For Dummies.