About This Chapter
Completing the Operating Cycle in Accounting - Chapter Summary and Learning Objectives
Businesses make purchases and then attempt to sell off inventory, turning goods or services into revenue. The parts of this inventory are measured, using multiple variables, within a given period between acquisition and cash realization, also known as an operating cycle. To make accurate calculations, there are vital accounting steps that must be taken.
The lessons in this chapter examine each element of the process that will ensure competent, thorough and accurate accounting when completing the operating cycle. Take a short quiz following every lesson to measure how well you have learned the material and contact an instructor with any questions. These lessons cover such information as:
- The effects of capitalizing & expensing
- How to account for different types of taxes
- What environmental liabilities are
- Different elements of employee compensation
|Accounting for Employee Compensation: Payroll, Leave & Bonuses||Examine the variables relating to employee compensation and accounting.|
|How to Account for Sales, Property & Income Taxes||Determine proper accounting for multiple tax requirements.|
|Accounting for Contingencies & Environmental Liabilities||Learn how to account for the unforeseeable by considering contingencies and environmental liabilities.|
|Comparing the Effects of Capitalizing & Expensing||Take a look at the similarities and differences between expensing & capitalizing.|
|Operations of an Income Statement||Identify the multiple operations of an income statement.|
1. Accounting for Employee Compensation: Payroll, Leave & Bonuses
Compensating your employees is a major part of making sure that your business operates efficiently. But what, exactly, is covered under the term 'compensation'? And how do the various aspects affect book-keeping? Watch this lesson for answers.
2. How to Account for Sales, Property & Income Taxes
Taxes are a certainty, for businesses as well as for individuals. In this lesson, we'll examine accounting principles for three common taxes that businesses encounter: sales tax, property tax, and income tax.
3. Accounting for Contingencies & Environmental Liabilities
Sometimes in business, things happen that can impact the bottom line of the company. But how do you plan for the financial aspect of these possible events? In this lesson, we'll look at how to account for contingencies and environmental liabilities.
4. Comparing the Effects of Capitalizing & Expensing
What does it mean to capitalize a purchase instead of expensing it? And how do you know which one to do? Watch this lesson to find out more about capitalization and the ways to know whether to capitalize or expense.
5. Operations of an Income Statement
How do you know how much money your company, or a company you're interested in investing in is making? In this lesson, we'll look at the art of the income statement, including different types and the major information to be found on them.
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Other chapters within the Accounting 101: Financial Accounting course
- Introduction to Accounting
- Financial Statements in Accounting
- Mechanics of the Accounting Cycle
- Adjusting Accounts and Preparing Financial Statements
- Internal Controls in Accounting
- Merchandising Operations and Inventory in Accounting
- Receivables in Accounting
- Long-Term Assets in Accounting
- Current and Long-Term Liabilities in Accounting
- Reporting & Analyzing Equity in Accounting
- Statement of Cash Flows in Accounting
- Financial Statement Analysis in Accounting
- Studying for Accounting 101