Index
453
inventory
controls, 191–193
defined, 171
Just In Time, 244
merchandising business, 171–173
overstating, 233–234
periodic.
See
periodic inventory system
perpetual.
See
perpetual inventory system
inventory days on hand ratio, 241–242, 372
inventory turnover ratio, 240–241, 371
inventory valuation methods
actual quantity of inventory, 231–232
effect of different methods, 231
effect of errors, 232–235
estimating methods, 237–240
ethical approach to estimation and
valuation, 242–244
first-in, first-out method, 226, 228–229,
250–251
fraud, 243–244
lower of cost and net realizable value,
235–236
measuring with ratios, 240–242
physical inventory method, 232
specific identification method, 226–228,
249–250
weighted-average cost method, 226,
229–231, 251–252
investing activities, cash from, 376
invoice, 35
J
journalizing transactions, 84–86
journals
cash payments, 259, 269–272
cash receipts, 259, 264–267
defined, 84
general, 259
overview, 261–262
purchase, 259, 267–268
sales, 258, 262–264
special, 258–259, 281–282
Just In Time ( JIT) inventory, 244
L
last-in, first-out (LIFO) inventory method,
231
ledgers
account errors, 303–305
general ledger, 86, 92–93, 311–313
subsidiary ledgers.
See
subsidiary
(subledgers) ledgers
ledgers account postings, 86–94
leverage analysis, 372–373
liabilities
current, 151
defined, 3
long-term, 151–152
payroll, 333–334
sequence of, 29
unlimited liability, 60
limited liability partnership (LLP), 61
limited partnership, 61
liquid assets, 29
liquidity, defined, 29
liquidity analysis, 364–366
long-term assets, 150–151
long-term liabilities, 151–152
losses, 355–356
lower of cost and net realizable value
(LCNRV), 235–236
M
managerial accounting, 58
manual accounting, evolution from, 156–157
manufacturing business, financial statements,
33
materiality, 68–69, 116
measurement, 68
merchandising business
closing entries, 188–190
controls relating to inventory, 191–193
financial statements, 32–33
