book

Accounting All-in-One For Dummies (+ Videos and Quizzes Online), 3rd Edition

Name: Accounting All-in-One For Dummies (+ Videos and Quizzes Online), 3rd Edition
ISBN: 9781119897668

by Michael Taillard, Joseph Kraynak, Kenneth W. Boyd

August 2022

Beginner

752 pages

19h 29m

English

For Dummies

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Cover
Title Page
Copyright
Introduction
About This BookFoolish AssumptionsIcons Used in This BookBeyond the BookWhere to Go from Here
Book 1: Accounting for Financial Systems
Chapter 1: Accounting for the Basics
Knowing What Bookkeeping and Accounting Are All AboutWrapping Your Brain around the Accounting CycleWorking the Fundamental Accounting Equation
Chapter 2: Charting Your Accounts
Navigating the Chart of AccountsSetting Up Your Chart of AccountsGiving Credit (Or Is It Debit?)Understanding Double-Entry Accounting
Chapter 3: Using Journal Entries and Ledgers
Keeping a JournalBringing It All Together in the LedgerPutting Accounting Software to Work for You
Chapter 4: Choosing an Accounting Method
Choosing Your MethodSorting through Standards for Other Types of Accounting
Chapter 5: Setting the Standards
Exploring the Origins of Accounting StandardsRecognizing the Role of the American Institute of Certified Public AccountantsChecking Out the U.S. Securities and Exchange CommissionGetting to Know the Financial Accounting Standards BoardGrasping Accounting Standards Around the Globe
Book 2: Recording Transactions

Chapter 1: Keeping the Books
Analyzing the Effect of Business TransactionsManaging Your Bookkeeping and Accounting SystemWrapping Up with End-of-Period Procedures
Chapter 2: Tracking Purchases
Keeping Track of InventoryBuying SuppliesHandling Billing and Payables
Chapter 3: Tallying Your Sales
Collecting on Cash SalesSelling on CreditProving Out the Cash RegisterTracking Sales DiscountsRecording Returns and AllowancesMonitoring Accounts ReceivableAccepting Your Losses
Chapter 4: Processing Employee Payroll and Benefits
Staffing Your BusinessCollecting Employee TaxesDetermining Net PaySurveying Your Benefits OptionsPreparing Payroll and Posting It in the BooksDepositing Employee Taxes
Chapter 5: Taxing Payrolls
Paying Employer Taxes on Social Security and MedicareCompleting Unemployment Reports and Paying Unemployment TaxesCarrying Workers’ Compensation InsuranceMaintaining Employee Records
Book 3: Adjusting and Closing Entries
Chapter 1: Depreciating Your Assets
Appreciating DepreciationComparing Depreciation OptionsTackling Taxes and Depreciation
Chapter 2: Interesting Rates
Deciphering Types of InterestHandling Interest IncomeDelving into Loans and Interest Expenses
Chapter 3: Proving Out Cash
Making Sure That Ending Cash Is RightClosing the Cash JournalsUsing a Temporary Posting Journal
Chapter 4: Reconciling Accounts and Closing Journal Entries
Reconciling Bank AccountsPrepping to Close: Checking for Accuracy and Tallying Things UpPosting to the General LedgerChecking Out Computerized Journal Records
Chapter 5: Checking Your Accuracy
Working with a Trial BalanceTesting Your Balance by Using Computerized Accounting SystemsDeveloping a Financial Statement WorksheetReplacing Worksheets with Computerized Reports
Chapter 6: Adjusting the Books
Adjusting All the Right AreasTesting an Adjusted Trial Balance
Book 4: Preparing Income Statements and Balance Sheets
Chapter 1: Stating Your Income
Understanding the Nature of ProfitChoosing the Income-Statement FormatDeciding What to Disclose in the Income StatementExamining How Sales and Expenses Change Assets and LiabilitiesConsidering the Diverse Financial Effects of Making a ProfitReporting Extraordinary Gains and LossesCorrecting Common Misconceptions about Profit
Chapter 2: Balancing Your Sheets
Homing in on Historic CostDiscovering What Makes an Asset CurrentExploring the Asset Section of the Balance Sheet
Chapter 3: Digging for Debt in the Balance Sheet
Seeing How Businesses Account for LiabilitiesKeeping Current Liabilities under ControlPlanning for Long-Term ObligationsAccounting for Bond Issuances
Chapter 4: Explaining Equity
Understanding How Owner Equity Varies among Business EntitiesDistinguishing between Two Types of Capital StockDefining Paid-In CapitalRecording Retained EarningsSpotting Reductions to Stockholders’ EquityExploring Stock SplitsComputing Earnings per Share
Chapter 5: Interpreting Income Statements and Balance Sheets
Rejoining the Income Statement and Balance SheetIntroducing Operating RatiosAdding Fixed Assets, Depreciation, and Owners’ EquityCompleting the Balance Sheet with Debt
Book 5: Reporting Your Statements
Chapter 1: Valuating Finances
Clarifying the Values of Assets in Balance SheetsIntroducing Business ValuationComparing Business Valuation Methods
Chapter 2: Watching Cash Flow and Equity
Understanding the Difference between Cash and ProfitFlowing Through Cash TransactionsNavigating the Three FlowsPreparing the Statement of Cash FlowsInterpreting the Statement of Cash FlowsStating Changes in Stockholders’ Equity
Chapter 3: Analyzing Financial Statements
Judging Solvency and LiquidityDriving the Balance SheetMeasuring ProfitabilityExploring Activity MeasuresComparing Horizontal and Vertical AnalysisUsing Common Size Financial Statements
Chapter 4: Explaining Disclosures
Questioning Self-GovernanceIdentifying Corporate CharacteristicsReviewing Common Explanatory NotesPutting the Onus on the Preparer
Chapter 5: Sharing Public Reports
Differentiating between Private and Public CompaniesFinding Purpose in ReportsReading the Annual Report to ShareholdersWalking through Form 10-K
Book 6: Planning and Budgeting for Your Business
Chapter 1: Looking at the Legals
Surveying StructuresGoing It Alone: Sole ProprietorshipsChoosing the Right Legal Structure for Income Tax
Chapter 2: Incorporating Your Business
Securing Capital: Starting with OwnersRecognizing Legal RootsIncorporating a Business
Chapter 3: Drawing Up a Business Plan
Outlining the Basic Business PlanDeveloping a Business PlanIncorporating Third-Party Information into Your Plan
Chapter 4: Budgeting for a Better Bottom Line
Brushing Up on BudgetingRecognizing Factors That Affect Your Budgeting ProcessUnderstanding Budgeting BasicsReviewing Revenue and Production Budgets
Chapter 5: Mastering Budgeting Strategies
Budgeting with Cash or Accrual AccountingBudgeting to Produce the Income Statement and Balance SheetFlexing Your Budget: When Plans Change
Chapter 6: Planning for Long-Term Obligations
Managing Long-Term DebtAccounting for Bonds
Book 7: Making Savvy Business Decisions
Chapter 1: Costing Jobs
Understanding How Job Costing WorksTaking a Closer Look at Indirect Costs by Using Normal CostingFollowing the Flow of Costs through a Manufacturing System
Chapter 2: Costing by the ABCs
Avoiding the Slippery Slope of Peanut Butter CostingDesigning an Activity-Based Costing SystemUsing Activity-Based Costing to Compute Total Cost, Profit, and Sale Price
Chapter 3: Contributing to the Margin
Computing Contribution MarginPreparing a Cost-Volume-Profit AnalysisGenerating a Break-Even AnalysisShooting for Target ProfitSetting a Margin of SafetyMeasuring Operating Leverage
Chapter 4: Accounting for Change with Variance Analysis
Setting Up Standard CostsUnderstanding VariancesTeasing Out Variances
Chapter 5: Pricing Wisely
Differentiating ProductsTaking All Costs into Account with Absorption CostingPricing at Cost PlusAccounting Extremes: Trying Variable-Cost PricingHitting the Bull’s-Eye (Your Target Cost)
Chapter 6: Formulating Equations
Analyzing ProfitabilityUsing Assets EffectivelyEvaluating Firm LiquidityChecking on Company SolvencyManaging Projects and Debt
Book 8: Handling Cash and Making Purchase Decisions
Chapter 1: Matching Costs with Revenue
Defining Costs and Expenses in the Business WorldDiscovering Which Costs Are DepreciatedPreparing a Depreciation ScheduleDeciding When to Recognize Revenue
Chapter 2: Exploring Inventory Cost Flows
Stating Inventory ValuationLogging Inventory for Service CompaniesClassifying Inventory TypesKnowing Inventory Valuation MethodsPreparing an Inventory Worksheet
Chapter 3: Buying Wisely
Identifying Incremental and Opportunity CostsKeeping Things Simple: The Cash Payback MethodNetting Present ValueMeasuring Internal Rate of ReturnConsidering Qualitative Factors
Chapter 4: Financing with Debt
Understanding the Basics of Debt CapitalDetermining When Debt Is Most AppropriateUsing Loans, Leases, and Other Sources of DebtGetting Creative with Capital
Chapter 5: Managing Results
Approaching Financial ReportsReviewing Profit and EarningsJudging the Company’s Cash PositionTackling Extraordinary Gains and LossesRecognizing the Risks of Restatement
Chapter 6: Acquiring New Business
Maximizing Business ValueBecoming a Team PlayerFunding a Business PurchaseWorking through Due DiligenceComing to Terms with a Sale Price
Book 9: Auditing for Financial Fraud
Chapter 1: Regulating Securities
Early Securities LawsThe Scope of SOX: Securities and IssuersThe Post-SOX Paper Trail
Chapter 2: Preventing Cash Losses from Embezzlement and Fraud
Preventing Loss with Internal ControlsPutting Internal Controls to WorkRecognizing Limitations of Internal Controls
Chapter 3: Assessing Audit Risk
Introducing Audit RiskRecognizing the Nature of a Client’s Business: Inherent RiskAssessing a Client’s Ability to Detect and Correct Problems: Control RiskFiguring Your Chances of Overlooking Inaccuracies: Detection RiskFollowing Risk Assessment ProceduresFiguring Out What’s Material and What Isn’tEvaluating Your Audit Risk Results
Chapter 4: Discovering Audits
Management Assertions: Assessing the Information a Client Gives YouEyeing the Four Concepts of Audit EvidenceApplying Professional JudgmentUsing Your Audit Program to Request the Right EvidenceDocumenting the Audit Evidence
Chapter 5: Auditing Internal Controls
Defining Internal ControlsIdentifying the Five Components of Internal ControlsDetermining When You Need to Audit Internal ControlsTesting a Client’s Reliability: Assessing Internal Control ProceduresLimiting Audit Procedures When Controls Are StrongTailoring Tests to Internal Control WeaknessesTiming a Client’s Control Procedures
Chapter 6: Scheming Scams
Frauds Committed by BusinessesFrauds Committed against Businesses
Chapter 7: Cooking the Books
Exploring the Financial Statement Fraud TriangleSpotting the Common Methods of FraudUncovering Financial Statement Fraud
Index
About the Author
Connect with Dummies
End User License Agreement

Content preview from Accounting All-in-One For Dummies (+ Videos and Quizzes Online), 3rd Edition

Chapter 5

Auditing Internal Controls

IN THIS CHAPTER

Understanding the nature and components of internal controls

Deciding whether to audit internal controls

Figuring out whether controls are strong or weak

Designing audits around strong or weak controls

Timing internal control procedures

Organizations should have checks and balances in place to safeguard their assets and to avoid material (significant) misstatements of financial information. In the accounting world, these checks and balances are called internal controls.

Think of the internal controls you use in your everyday life: Before you go to bed at night, do you check all the doors and windows to make sure they’re locked? That’s an internal control procedure that helps you ensure safety and protect your assets. Do you go around the house turning off lights and checking that your children are in bed? You’re using more internal controls (to help conserve energy and protect your most prized assets).

As part of an audit team, ...

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Accounting All-in-One For Dummies (+ Videos and Quizzes Online), 3rd Edition

by Michael Taillard, Joseph Kraynak, Kenneth W. Boyd

Auditing Internal Controls

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.