Cheat Sheet

Posted on May 13, 2026 in Financial and Accounting Management

CHAPTER 10 — Plant Assets, Natural Resources, Intangibles

Asset Classification

Depreciated (Tangible)

• Buildings • Equipment • Machinery • Vehicles

Depleted (Natural Resources)

• Timber • Oil • Minerals

Amortized (Intangible)

• Patents • Copyrights • Franchises • Trademarks (limited life)

Cost of Assets

Total Cost = all expenditures to get asset ready for use

Includes: purchase price, taxes, shipping, installation, testing, legal fees.

Depreciation Methods

Straight‑Line • (Cost – Salvage) ÷ Useful Life

Double‑Declining Balance • Rate = 2 ÷ Life • Depreciation = Beginning Book Value × Rate

Units‑of‑Production • Rate per Unit = (Cost – Salvage) ÷ Total Units • Depreciation = Rate × Units Used

Depletion

• (Cost – Salvage) ÷ Total Units × Units Extracted

Disposal of Assets

Gain/Loss = Cash Received – Book Value

Sale at Gain • Dr. Cash • Dr. Accumulated Depreciation  Cr. Asset  Cr. Gain on Sale

Sale at Loss • Dr. Cash • Dr. Accumulated Depreciation • Dr. Loss on Sale  Cr. Asset

Discard • Dr. Accumulated Depreciation • Dr. Loss on Disposal  Cr. Asset

Amortization

• Cost ÷ Useful Life • Dr. Amortization Expense  Cr. Accumulated Amortization

Goodwill

• Recorded only when purchasing a business • Not amortized; tested for impairment

CHAPTER 11 — Current Liabilities & Payroll

Payroll Accounting

Gross Pay = Hours × Rate

Net Pay = Gross – Employee Deductions

Employer Payroll Cost = Gross + Employer Taxes

Employee Payroll Entry • Dr. Salary Expense  Cr. FICA Payable  Cr. Tax Payable  Cr. Cash

Employer Payroll Taxes • Dr. Payroll Tax Expense  Cr. FICA  Cr. FUTA  Cr. SUTA

Overtime

• Overtime rate = 1.5 × regular rate

Notes Payable

Interest = Principal × Rate × Time/360

Accrual Entry • Dr. Interest Expense  Cr. Interest Payable

CHAPTER 12 — Partnerships

Formation & Admission

Use market value of contributed assets

Formation • Dr. Asset  Cr. Partner, Capital

Admission of New Partner • Dr. Cash  Cr. Old Partner, Capital  Cr. New Partner, Capital

Income Allocation

• Equal • Ratio • Salary + interest + remainder

Entry • Dr. Income Summary  Cr. Partner A, Capital  Cr. Partner B, Capital

CHAPTER 13 — Corporations & Equity

Stock Issuance

At Par • Dr. Cash  Cr. Common Stock

Above Par • Dr. Cash  Cr. Common Stock  Cr. PIC—Excess

Non‑Cash Assets • Dr. Asset  Cr. Common Stock  Cr. PIC—Excess

Dividends

Declaration • Dr. Retained Earnings  Cr. Dividends Payable

Payment • Dr. Dividends Payable  Cr. Cash

Preferred Allocation • Preferred = Par × Rate × Shares • Common = Remainder

Stock Dividends

Small (<25%)
— use market value Large (>25%)
— use par value

Declaration • Dr. Retained Earnings  Cr. CS Dividend Distributable  Cr. PIC—Excess (if small)

Issuance • Dr. CS Dividend Distributable  Cr. Common Stock

Treasury Stock

Purchase • Dr. Treasury Stock  Cr. Cash

Reissue Above Cost • Dr. Cash  Cr. Treasury Stock  Cr. PIC—TS

Reissue Below Cost • Dr. Cash • Dr. PIC—TS (if needed)  Cr. Treasury Stock

CHAPTER 14 — Bonds

Bond Issuance

Discount • Dr. Cash • Dr. Discount  Cr. Bonds Payable

Premium • Dr. Cash  Cr. Premium  Cr. Bonds Payable

Straight‑Line Amortization

Amortization = Total Discount or Premium ÷ # of Periods

Discount Interest Entry • Dr. Interest Expense  Cr. Discount  Cr. Cash

Premium Interest Entry • Dr. Interest Expense • Dr. Premium  Cr. Cash

CHAPTER 18 — Managerial Accounting Basics

Cost Classifications

Product Costs (Inventoriable)

• Direct Materials • Direct Labor • Factory Overhead

Period Costs (Expensed)

• Selling • Administrative

Rule:

Inside factory → product. Outside → period.

Manufacturing Costs

COGM • DM Used + DL + FOH + Beg WIP – End WIP

COGS • Beg FG + COGM – End FG

Factory Overhead

Includes: indirect materials, indirect labor, factory utilities, depreciation, insurance, taxes, maintenance.

Inventory Accounts

• Raw Materials • Work in Process • Finished Goods

CHAPTER 19 — Job Order Costing

WIP & FG Calculations

• DM + DL + Applied FOH

Journal Entries

Predetermined Overhead Rate

• POHR = Estimated FOH ÷ Estimated Activity Base • Applied OH = POHR × Actual Activity

Over/Under‑Applied FOH

Overapplied:

credit balance → decrease COGS Underapplied:
debit balance → increase COGS