Distinguish among types of business transactions (FI:673)

Business transactions refer to any exchange of goods, services, or money between two or more parties. There are several different types of business transactions, each with its own unique characteristics. These include sales transactions, purchase transactions, financing transactions, and investment transactions. Sales transactions involve the exchange of goods or services for money. Purchase transactions involve the exchange of money for goods or services. Financing transactions involve the exchange of money for the purpose of borrowing or lending. Investment transactions involve the exchange of money for the purpose of investing in assets. Each type of transaction has its own set of rules and regulations that must be followed in order to ensure a successful transaction.

Distinguish among types of business documentation (FI:674)

Business documentation is a broad term that encompasses any type of written material related to a business. This includes documents such as contracts, policies, procedures, reports, and other forms of communication. The types of business documentation can be divided into two main categories: internal and external. Internal documents are those that are used within the company, such as employee handbooks, policies, and procedures. External documents are those that are used outside of the company, such as contracts, customer service documents, and marketing materials. Each type of document serves a different purpose and has its own set of rules and regulations. Understanding the different types of business documentation is essential for any business to ensure that all documents are accurate and up to date.

Demonstrate the effects of transactions on the accounting equation (FI:378)

The accounting equation is an equation that shows the relationship between a company's assets, liabilities, and owner's equity. Transactions can have an effect on the accounting equation by either increasing or decreasing the value of one of the three components. For example, when a company purchases an asset, the asset account increases and the cash account decreases, resulting in an increase in the asset side of the equation and a decrease in the cash side of the equation. Similarly, when a company pays off a liability, the liability account decreases and the cash account decreases, resulting in a decrease in the liability side of the equation and a decrease in the cash side of the equation. Transactions can also affect the owner's equity side of the equation, such as when a company issues stock or pays dividends. In this case, the owner's equity account increases or decreases, depending on the type of transaction.

Prepare a chart of accounts (FI:379)

A chart of accounts is a list of all the accounts used by a business to record its financial transactions. It is an organized listing of all the accounts that a company has identified and made available for recording transactions in its accounting system. The chart of accounts typically includes asset, liability, equity, income, and expense accounts. It is used to classify and track the financial activities of the business, and to prepare financial statements.

Explain the nature of special journals (FI:407)

Special journals are accounting journals that are used to record transactions related to specific activities. These journals are used to record transactions that occur frequently and are related to a specific type of activity, such as sales, purchases, cash receipts, and cash payments. Special journals are used to make the recording process more efficient and to ensure accuracy in the accounting records. The entries in the special journals are then posted to the general ledger, which is the main accounting record.

Journalize business transactions (FI:381)

Journalizing business transactions is the process of recording financial transactions in a journal. This is done by entering the date, description, and amount of each transaction into the journal. The journal is then used to create financial statements such as the balance sheet, income statement, and statement of cash flows. Journalizing is an important step in the accounting process as it helps to ensure accuracy and completeness of financial records.

Post journal entries to general ledger accounts (FI:382)

Posting journal entries to general ledger accounts is the process of transferring the financial transactions recorded in the journal to the appropriate accounts in the general ledger. This process ensures that all financial transactions are accurately recorded and tracked in the general ledger. The code is used to identify the general ledger accounts that should be used for the posting of journal entries. This code helps to ensure that the correct accounts are used for the posting of journal entries.

Prepare a trial balance (FI:383)

A trial balance is a financial statement that lists the balances of all accounts in a company's general ledger at a specific point in time. It is used to ensure that the total of all debits equals the total of all credits, which is an important step in the accounting cycle. Preparing a trial balance involves listing all of the accounts in the general ledger, their respective debit and credit balances, and the total of each column. This helps to identify any errors in the accounting records and ensure that the books are in balance.

Journalize and post adjusting entries (FI:384)

A journalizing and posting adjusting entries is a process used to record and update financial information in a company's accounting records. Adjusting entries are made to ensure that the company's financial statements accurately reflect the company's financial position. Adjusting entries are typically made at the end of an accounting period to account for transactions that have occurred but have not yet been recorded. Examples of adjusting entries include accruals, deferrals, depreciation, and amortization. After the adjusting entries have been journalized, they are then posted to the company's general ledger. This ensures that the company's financial statements are accurate and up-to-date.

Journalize and post closing entries (FI:385)

A journalizing and posting closing entries is the process of transferring the balances of temporary accounts to permanent accounts in order to close out the books for the period. This is done by creating journal entries that debit the balance of the temporary accounts and credit the balance of the permanent accounts. The entries are then posted to the general ledger. This process is necessary in order to start the next period with a clean slate and ensure that the financial statements are accurate.

Prepare a post-closing trial balance (FI:386)

A post-closing trial balance is a financial statement that lists all of the accounts in a company's chart of accounts after all of the closing entries have been made. It is used to verify that the total of all the debits equal the total of all the credits after the closing entries have been made. The post-closing trial balance is the first step in the preparation of the financial statements. It is also used to ensure that all of the accounts have been closed properly and that the financial statements are in balance.

Identify and correct accounting errors (FI:675)

Accounting errors are mistakes made in the recording of financial transactions. These errors can be identified by comparing the financial statements to the source documents and making sure that all transactions are recorded accurately. To correct accounting errors, the incorrect entry must be reversed and the correct entry must be made. For example, if an incorrect debit was made to an account, the incorrect debit must be reversed and the correct credit must be made.

Prepare worksheets (FI:387)

Preparing worksheets involves gathering the necessary financial information and organizing it into a worksheet format. This includes collecting data from various sources, such as bank statements, invoices, and other documents, and entering it into the worksheet. The worksheet should be organized in a way that makes it easy to read and understand. Once the data is entered, calculations can be made to determine the financial position of the business. The worksheet should be reviewed and any errors should be corrected before it is finalized.

Reconcile cash (FI:396)

Reconciling cash is the process of comparing the cash balance in the company's accounting records to the actual cash balance in the bank account. This process is done to ensure that the two balances match and that all transactions have been properly recorded. The reconciliation process involves reviewing all cash transactions, such as deposits, withdrawals, and transfers, to ensure that they are accurately reflected in the accounting records. Any discrepancies between the two balances should be investigated and corrected.

Account for petty cash (FI:676)

Account for petty cash is a general ledger account used to track the small amounts of cash used for miscellaneous expenses. This account is used to record the amount of cash that is available for small purchases, such as office supplies, postage, and other minor expenses. The petty cash account is typically funded with a set amount of cash, and the balance is adjusted as expenses are incurred. The petty cash account is typically reconciled on a regular basis to ensure that the amount of cash available is accurate.

Account for cash receipts (e.g., record cash, record income) (FI:677)

Accounting for cash receipts involves recording all cash received from customers, vendors, and other sources. This includes recording the amount of cash received, the source of the cash, and the purpose for which the cash was received. This information is then used to record income in the company's financial statements. This helps to ensure that all cash received is properly accounted for and that the company's financial statements accurately reflect its financial position.

Account for cash payments (e.g., record cash, record expenses) (FI:678)

Accounting for cash payments involves recording all cash payments made by a business. This includes recording the cash received from customers, as well as recording the expenses paid with cash. This is important for tracking the cash flow of the business, as well as for tax purposes. The cash payments should be recorded in the accounting system, such as a general ledger, to ensure accuracy and consistency.

Explain the nature of accounts payable (FI:409)

Accounts payable is a type of liability account that records the amount of money a company owes to its suppliers for goods and services purchased on credit. This account is used to track the amount of money the company owes to its suppliers and is used to generate invoices and payments. Accounts payable is typically reported on the balance sheet as a current liability, meaning that the amount owed is due within one year.

Account for purchases (e.g., purchase requisitions, purchase orders, invoices, vouchers, etc.)(FI:679)

Accounting for purchases is the process of tracking and recording all purchases made by a business. This includes purchase requisitions, purchase orders, invoices, vouchers, and other documents related to the purchase. This process is important for businesses to ensure that all purchases are properly recorded and accounted for in the financial records. It also helps to ensure that all purchases are made in accordance with the company's policies and procedures.

Process accounts payable (e.g., maintain vendor file, post to ledger, process invoices and checks)(FI:680)

Processing accounts payable involves a number of steps to ensure that vendors are paid in a timely and accurate manner. This includes maintaining a vendor file, which contains information about each vendor, such as contact information, payment terms, and any discounts they may offer. This information is used to post to the ledger, which is a record of all financial transactions. Invoices and checks are then processed, which involves verifying the accuracy of the invoice, ensuring that the payment is made in accordance with the terms of the agreement, and recording the transaction in the ledger. Finally, the payment is sent to the vendor. This process ensures that vendors are paid in a timely and accurate manner, and that all financial transactions are properly recorded.

Explain the nature of accounts receivable (FI:424)

Accounts receivable is an asset account that records the amounts owed to a company by its customers for goods or services that have been provided on credit. This account is used to track the amount of money that is owed to the company by its customers and is used to calculate the company's accounts receivable turnover ratio. Accounts receivable is typically reported on the balance sheet as a current asset.

Account for sales (e.g., invoices, sales receipts, etc.) (FI:682)

Accounting for sales is the process of recording sales transactions in the accounting system. This includes creating invoices, sales receipts, and other documents to track the sale of goods and services. The information is used to create financial statements and other reports to provide an accurate picture of the company's financial performance. This helps to ensure that the company is compliant with financial regulations and that taxes are paid correctly.

Process accounts receivable (e.g., post to ledger, process payment, process uncollectible account,etc.) (FI:683)

Processing accounts receivable involves a number of steps to ensure that all customer payments are properly recorded and accounted for. This includes posting payments to the ledger, processing payments, and processing uncollectible accounts. Posting payments to the ledger involves recording the payment in the appropriate account and updating the customer's balance. Processing payments involves verifying the accuracy of the payment and ensuring that the payment is applied to the correct account. Processing uncollectible accounts involves determining if a customer's account is uncollectible and taking the appropriate action to collect the debt.

Record inventory transactions (FI:432)

Record inventory transactions is a process that involves tracking and recording all changes in inventory levels. This includes purchases, sales, returns, and transfers of inventory. This process is important for businesses to ensure accurate inventory levels and to maintain accurate financial records. By tracking inventory transactions, businesses can identify any discrepancies in their inventory levels and take corrective action if necessary.

Process inventory adjustments (e.g., shrinkage, obsolescence, returns, etc.) (FI:435)

Processing inventory adjustments involves tracking and accounting for changes in inventory levels due to factors such as shrinkage, obsolescence, returns, and other factors. This process is important for businesses to ensure accurate inventory records and to ensure that inventory levels are accurately reflected in financial statements. This process involves tracking the quantity and value of inventory adjustments, recording the adjustments in the accounting system, and adjusting the inventory levels accordingly.

Explain methods used to value inventory (e.g., FIFO, LIFO, average cost, etc.) (FI:586)

Inventory valuation is the process of determining the cost of goods that a business has in its possession. There are several methods used to value inventory, including First In First Out (FIFO), Last In First Out (LIFO), and Average Cost. FIFO assumes that the first items purchased are the first items sold. This method is useful for businesses that sell perishable goods, as it allows them to account for the cost of goods sold in the same period they were purchased. LIFO assumes that the last items purchased are the first items sold. This method is useful for businesses that sell non-perishable goods, as it allows them to account for the cost of goods sold in the same period they were purchased. Average Cost is a method that takes the average cost of all items purchased and uses that as the cost of goods sold. This method is useful for businesses that sell a variety of items, as it allows them to account for the cost of goods sold in the same period they were purchased.

Determine the cost/value of inventory (FI:436)

The cost/value of inventory is the total cost of all the items in a company's inventory. This includes the cost of the items when they were purchased, as well as any additional costs associated with storing or maintaining the items. The value of the inventory is determined by subtracting the total cost of the items from the current market value of the items. This calculation helps a company determine the profitability of their inventory and can be used to make decisions about how to manage their inventory.

Explain the nature of payroll expenses (e.g., Social Security tax, Medicare tax, FUTA, SUTA, workers'compensation, etc.) (FI:638)

Payroll expenses are the costs associated with compensating employees for their work, including salaries or wages, benefits, and taxes. In the United States, payroll taxes are comprised of Social Security tax, Medicare tax, Federal Unemployment Tax Act (FUTA), and State Unemployment Tax Act (SUTA). Social Security tax and Medicare tax are calculated as a percentage of an employee's gross pay, and the employer is responsible for matching these amounts. FUTA and SUTA are taxes paid by the employer to fund state and federal unemployment insurance programs. In addition to taxes, employers are also responsible for providing workers' compensation insurance, which provides benefits to employees who are injured or become ill as a result of their job. By understanding the nature of payroll expenses, employers can accurately budget for labor costs and comply with relevant laws and regulations.

Maintain employee earnings records (e.g., timecards, time sheets, etc.) (FI:134)

Maintaining employee earnings records is an important part of managing payroll and ensuring accurate payment of wages. This includes keeping track of timecards, time sheets, and other documents that record the hours worked by each employee. This information is used to calculate the wages due to each employee, and to ensure that all wages are paid in a timely manner. Keeping accurate records of employee earnings is essential for compliance with labor laws and regulations.

Calculate employee earnings (FI:438)

Calculate employee earnings refers to the process of determining the total amount of money an employee has earned in a given period of time. This calculation is typically done by taking the employee's hourly wage, multiplying it by the number of hours worked, and then adding any additional compensation such as bonuses or overtime pay. The resulting figure is the employee's total earnings for the period.

Calculate payroll taxes (FI:442)

Calculating payroll taxes involves calculating the amount of taxes that must be withheld from an employee's wages. This includes federal income taxes, Social Security taxes, and Medicare taxes. The employer is responsible for withholding the correct amount of taxes from the employee's wages and remitting them to the appropriate government agencies. The employer must also provide the employee with a W-2 form at the end of the year, which details the amount of taxes withheld.

Calculate employee deductions (FI:439)

Employee deductions refer to the amount of money that is taken out of an employee's paycheck for taxes, insurance, and other deductions. This amount is calculated based on the employee's salary, tax rate, and other factors. The deductions are then sent to the appropriate government agencies or insurance companies.

Account for payroll transactions (e.g., earnings, taxes, benefits, other deductions) (FI:686)

Accounting for payroll transactions involves tracking and recording all payments made to employees, including earnings, taxes, benefits, and other deductions. This includes tracking the gross wages earned by each employee, calculating the taxes and deductions that must be withheld from their wages, and recording the net wages paid to each employee. Additionally, the employer must track and record all payments made for employee benefits, such as health insurance, retirement contributions, and other deductions. All of these transactions must be accurately recorded in the employer's accounting system in order to ensure compliance with applicable laws and regulations.

Process payroll payments and remittances (e.g., employees, benefits, taxes) (FI:687)

Processing payroll payments and remittances involves collecting and managing the financial information related to employee salaries, benefits, and taxes. This includes calculating the amount of wages and deductions due to each employee, issuing payments, and remitting taxes to the appropriate government agencies. It also involves keeping accurate records of all payroll transactions and ensuring compliance with applicable laws and regulations.

Prepare federal, state, and local payroll tax returns and reports (FI:443)

Preparing federal, state, and local payroll tax returns and reports involves calculating and filing taxes for employees and employers. This includes calculating and filing federal income taxes, Social Security taxes, Medicare taxes, state income taxes, and local taxes. It also involves filing quarterly and annual payroll tax returns and reports with the appropriate government agencies. This process requires knowledge of tax laws and regulations, as well as the ability to accurately calculate and file taxes.

Discuss the nature of long-term assets (e.g., tangible assets, intangible assets, natural resources,etc.) (FI:642)

Long-term assets are assets that are expected to provide economic benefits to a business for more than one year. These assets can be tangible, such as property, plant, and equipment, or intangible, such as patents, trademarks, and goodwill. Natural resources, such as oil reserves or timberlands, are also considered long-term assets. Tangible assets can be depreciated over time, while intangible assets may be amortized. Long-term assets are typically critical to a business's operations and can have a significant impact on its financial statements. They require careful management and maintenance to ensure their value is maximized over their useful life. Long-term assets can also be a source of financing for a business, as they can be used as collateral for loans. Understanding the nature of long-term assets is essential for businesses to make informed decisions regarding investment, financing, and overall asset management.

Describe the methods used to value long-term assets (e.g., tangible assets, intangible assets,natural resources, etc.) (FI:690)

The methods used to value long-term assets depend on the type of asset being valued. Tangible assets, such as buildings and equipment, are typically valued using the cost approach, which takes into account the cost of acquisition, depreciation, and any improvements made to the asset. Intangible assets, such as patents and trademarks, are typically valued using the market approach, which takes into account the market value of similar assets. Natural resources, such as oil and gas reserves, are typically valued using the discounted cash flow approach, which takes into account the expected future cash flows from the asset.

Account for long-term assets (e.g., record acquisition, record depreciation/amortization, recorddisposal) (FI:691)

Long-term assets are assets that are held by a company for more than one year. These assets are recorded in the company's balance sheet and are used to generate income for the company. To account for long-term assets, companies must record the acquisition of the asset, record any depreciation or amortization of the asset, and record the disposal of the asset. Acquisition of the asset is recorded when the asset is purchased and is recorded at the cost of the asset. Depreciation or amortization of the asset is recorded to account for the decrease in the value of the asset over time. Finally, the disposal of the asset is recorded when the asset is sold or otherwise disposed of.

Account for long-term liabilities (e.g., bonds payable, notes payable, leases, etc.) (FI:692)

Long-term liabilities are obligations that are due to be paid back over a period of time that is longer than one year. Examples of long-term liabilities include bonds payable, notes payable, leases, and other contractual obligations. These liabilities are typically recorded on the balance sheet and are accounted for by recognizing the present value of the future payments that are due. The present value is calculated by discounting the future payments at an appropriate rate of interest. The periodic payments are then recognized as an expense in the income statement.

Account for provisions (e.g., restructurings, warranties, customer refunds, etc.) (FI:693)

Accounting for provisions involves recording the costs associated with any restructuring, warranties, customer refunds, or other similar costs that a company may incur. This includes recording the costs of any restructuring, such as the costs associated with closing a business, as well as any costs associated with warranties, customer refunds, or other similar costs. The costs associated with these provisions must be recorded in the company's financial statements in order to accurately reflect the company's financial position.

Calculate taxes owed by clients (i.e., individual and business) (FI:696)

Calculating taxes owed by clients is an important part of the accounting process. For individuals, taxes are calculated based on their income, deductions, and credits. For businesses, taxes are calculated based on their income, deductions, and credits, as well as any applicable business taxes. To calculate taxes owed by clients, accountants must first determine the total income of the client, then subtract any applicable deductions and credits. The remaining amount is the amount of taxes owed by the client. Accountants must also ensure that the taxes are calculated accurately and in accordance with applicable laws and regulations.

Explain record keeping procedures for tax accounting (FI:484)

Record keeping procedures for tax accounting involve the tracking and documentation of financial transactions related to taxes. This includes keeping records of income, expenses, deductions, credits, and other financial information related to taxes. This information should be kept in an organized manner, such as in a spreadsheet or accounting software, and should include the date, description, and amount of each transaction. Additionally, any supporting documents, such as receipts, invoices, and bank statements, should be kept in a secure location. It is important to keep accurate and up-to-date records in order to ensure that all tax obligations are met.

Account for taxes (FI:697)

Accounting for taxes is the process of tracking and recording the taxes that a business owes to the government. This includes tracking the taxes that have been paid, calculating the taxes that are due, and filing the necessary paperwork with the relevant tax authorities. It also involves understanding the different types of taxes that a business may be liable for, such as income taxes, sales taxes, property taxes, and payroll taxes. Additionally, it involves staying up to date with any changes in tax laws and regulations, and ensuring that the business is compliant with all applicable tax laws.

Prepare tax returns for clients (i.e., individuals and business) (FI:698)

Preparing tax returns for clients involves gathering the necessary financial information from the client, such as income, deductions, and credits, and then using that information to calculate the client's tax liability. This process includes completing the appropriate tax forms, such as the 1040 for individuals and the 1120 for businesses, and ensuring that all information is accurate and up-to-date. Once the tax return is completed, the client can then submit it to the appropriate tax authority.

Identify tax issues for clients (FI:485)

Tax issues for clients refer to the various tax-related matters that a client may need to address when filing their taxes. These issues can include filing deadlines, deductions, credits, and other tax-related matters. It is important for clients to understand their tax obligations and to be aware of any potential tax issues that may arise. A tax professional can help clients identify and address any tax issues they may have.

Differentiate among management accounting responsibility centers (i.e., cost, profit, investment,revenue) (FI:717)

Management accounting responsibility centers are crucial for evaluating the performance of different segments of an organization. The four types of responsibility centers are cost centers, profit centers, investment centers, and revenue centers. Cost centers focus on controlling and managing costs, while profit centers aim to generate revenue and manage costs to produce a profit. Investment centers are responsible for managing assets and making investment decisions, while revenue centers focus on generating revenue. Each responsibility center has a specific focus and is evaluated based on different performance metrics. By analyzing the performance of each center, organizations can make informed decisions on resource allocation, investment, and overall management of their operations. Ultimately, the appropriate use of responsibility centers can lead to improved efficiency and profitability for a business.

Discuss the use of cost-volume-profit analysis (FI:718)

Cost-volume-profit (CVP) analysis is a tool used by businesses to analyze the relationship between costs, sales volume, and profits. It is used to determine how changes in costs and sales volume affect a company's profits. CVP analysis can help businesses identify the most profitable sales volume and cost structure, as well as the break-even point. It can also be used to evaluate the impact of pricing decisions, cost control strategies, and other business decisions on profits. CVP analysis is an important tool for businesses to understand their costs and profits, and to make informed decisions about their operations.

Discuss cost accounting systems (e.g., job costing, process costing, standard costing, activity-basedcosting [ABC]) (FI:719)

Cost accounting systems are used to track and analyze the costs associated with a business. Job costing, process costing, standard costing, and activity-based costing (ABC) are all types of cost accounting systems. Job costing is used to track the costs associated with a specific job or project. This system is used to track the costs of materials, labor, and overhead associated with a specific job. Process costing is used to track the costs associated with a specific process. This system is used to track the costs of materials, labor, and overhead associated with a specific process. Standard costing is used to track the costs associated with a specific product or service. This system is used to track the costs of materials, labor, and overhead associated with a specific product or service. Activity-based costing (ABC) is used to track the costs associated with specific activities. This system is used to track the costs of materials, labor, and overhead associated with specific activities. ABC is used to identify and analyze the costs associated with activities that are not directly related to the production of a product or service. Overall, cost accounting systems are used to track and analyze the costs associated with a business. Job costing, process costing, standard costing, and activity-based costing (ABC) are all types of cost accounting systems that can be used to track and analyze the costs associated with a business.

Describe common management accounting performance measures (e.g., balanced scorecard,return on investment [ROI], customer profitability analysis, etc.) (FI:721)

Management accounting performance measures are tools used by businesses to measure and evaluate their performance. Common measures include the Balanced Scorecard, Return on Investment (ROI), and Customer Profitability Analysis. The Balanced Scorecard is a performance measurement system that looks at four key areas of a business: financial, customer, internal process, and learning and growth. It helps businesses to measure their performance in each of these areas and identify areas of improvement. Return on Investment (ROI) is a measure of the profitability of an investment. It is calculated by dividing the net profit of an investment by the cost of the investment. Customer Profitability Analysis is a tool used to measure the profitability of individual customers. It helps businesses to identify which customers are most profitable and which ones are not. These performance measures help businesses to identify areas of improvement and make better decisions.

Distinguish between variable costing and absorption costing (FI:720)

Variable costing and absorption costing are two different methods of accounting for the costs of producing a product. Variable costing is a method of accounting that only includes the variable costs of production, such as direct materials, direct labor, and variable overhead. These costs are charged directly to the cost of goods sold. Absorption costing is a method of accounting that includes both the variable costs of production and the fixed costs of production, such as fixed overhead. These costs are allocated to the cost of goods sold and to the inventory.