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1. Introduction to Accounting(0)

Welcome!
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Types of Accounting
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Business Organization
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Useful Information
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Fundamental Accounting Equation
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The Financial Statements
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Sample Financial Statements - Coca Cola
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2. Transaction Analysis(0)

Journal Entries: Debits and Credits
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Accounting Flow Intuition: BASE Formula
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Journal Entries: Business Formation Example
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Trial Balance
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Classified Balance Sheet Components
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3. Accrual Accounting Concepts(0)

Accrual Accounting vs. Cash Basis Accounting
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Revenue Recognition and Expense Recognition
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Introduction to Adjusting Journal Entries and Prepaid Expenses
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Adjusting Entries: Supplies
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Adjusting Entries: Unearned Revenue
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Adjusting Entries: Accrued Expenses
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Adjusting Entries: Accrued Revenues
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Adjusting Entries: Depreciation
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Summary of Adjusting Entries
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Unadjusted vs Adjusted Trial Balance
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Closing Entries
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Post-Closing Trial Balance
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4. Merchandising Operations(0)

Service Company vs. Merchandising Company
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Net Sales
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Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
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Perpetual Inventory - Purchases
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Perpetual Inventory - Freight Costs
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Perpetual Inventory - Purchase Discounts
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Perpetual Inventory - Purchasing Summary
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Periodic Inventory - Purchases
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Periodic Inventory - Freight Costs
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Periodic Inventory - Purchase Discounts
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Periodic Inventory - Purchasing Summary
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Single-step Income Statement
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Multi-step Income Statement
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Comprehensive Income
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5. Inventory(0)

Merchandising Company vs. Manufacturing Company
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Physical Inventory Count, Ownership of Goods, and Consigned Goods
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Specific Identification
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Periodic Inventory - FIFO, LIFO, and Average Cost
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Perpetual Inventory - FIFO, LIFO, and Average Cost
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Financial Statement Effects of Inventory Costing Methods
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Lower of Cost or Market
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Inventory Errors
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6. Internal Controls and Reporting Cash(0)

Fraud and the Fraud Triangle
(0)

Sarbanes-Oxley Act
(0)

Five Components of Internal Controls
(0)

Principles of Control Activities
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Limitations of Internal Controls
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Petty Cash
(0)

Bank Reconciliation
(0)

Journal Entries for Bank Reconciliation
(0)

7. Receivables and Investments(0)

Types of Receivables
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Net Accounts Receivable: Direct Write-off Method
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Net Accounts Receivable: Allowance for Doubtful Accounts
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Net Accounts Receivable: Percentage of Sales Method
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Net Accounts Receivable: Aging of Receivables Method
(0)

Notes Receivable
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Introduction to Investments in Securities
(0)

Trading Securities
(0)

Available-for-Sale (AFS) Securities
(0)

Held-to-Maturity (HTM) Securities
(0)

Equity Method
(0)

8. Long Lived Assets(0)

Initial Cost of Long Lived Assets
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Basket (Lump-sum) Purchases
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Ordinary Repairs vs. Capital Improvements
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Depreciation: Straight Line
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Depreciation: Declining Balance
(0)

Depreciation: Units-of-Activity
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Depreciation: Summary of Main Methods
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Depreciation for Partial Years
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Retirement of Plant Assets (No Proceeds)
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Sale of Plant Assets
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Change in Estimate: Depreciation
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Intangible Assets and Amortization
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Natural Resources and Depletion
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Asset Impairments
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Exchange for Similar Assets
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9. Current Liabilities(0)

Types of Liabilities
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Notes Payable
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Payroll and Payroll Taxes
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Sales Tax Payable
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Current Portion of Long Term Debt
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Contingent Liabilities
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Estimated Liabilities: Warranties
(0)

10. Time Value of Money(0)

Time Value of Money Equations
(0)

Using Time Value of Money Tables
(0)

11. Long Term Liabilities(0)

Introduction to Bonds and Bond Characteristics
(0)

Face Value Bonds
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Discount on Bonds
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Premium on Bonds
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Zero Coupon Bonds
(0)

Straight Line Amortization of Bond Premium or Discount
(0)

Effective Interest Amortization of Bond Premium or Discount
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Redeeming Bonds before Maturity
(0)

12. Stockholders' Equity(0)

Characteristics of a Corporation
(0)

Shares Authorized, Issued, and Outstanding
(0)

Issuing Par Value Stock
(0)

Issuing No Par Value Stock
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Issuing Common Stock for Assets or Services
(0)

Retained Earnings
(0)

Retained Earnings: Prior Period Adjustments
(0)

Preferred Stock
(0)

Treasury Stock
(0)

Dividends and Dividend Preferences
(0)

Stock Dividends
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Stock Splits
(0)

13. Statement of Cash Flows(0)

Introduction to the Statement of Cash Flows
(0)

Operating Activities: Indirect Method
(0)

Operating Activities: Direct Method
(0)

Investing Activities
(0)

Financing Activities
(0)

Significant Noncash Activities
(0)

14. Financial Statement Analysis(0)

Horizontal Analysis
(0)

Vertical Analysis
(0)

Common-sized Statements
(0)

Trend Percentages
(0)

Discontinued Operations and Extraordinary Items
(0)

Introduction to Ratios
(0)

Ratios: Earnings Per Share (EPS)
(0)

Ratios: Working Capital and the Current Ratio
(0)

Ratios: Quick (Acid Test) Ratio
(0)

Ratios: Gross Profit Rate
(0)

Ratios: Profit Margin
(0)

Ratios: Quality of Earnings Ratio
(0)

Ratios: Inventory Turnover
(0)

Ratios: Average Days in Inventory
(0)

Ratios: Accounts Receivable (AR) Turnover
(0)

Ratios: Average Collection Period (Days Sales Outstanding)
(0)

Ratios: Return on Assets (ROA)
(0)

Ratios: Total Asset Turnover
(0)

Ratios: Fixed Asset Turnover
(0)

Ratios: Profit Margin x Asset Turnover = Return On Assets
(0)

Ratios: Accounts Payable Turnover
(0)

Ratios: Days Payable Outstanding (DPO)
(0)

Ratios: Times Interest Earned (TIE)
(0)

Ratios: Debt to Asset Ratio
(0)

Ratios: Debt to Equity Ratio
(0)

Ratios: Payout Ratio
(0)

Ratios: Dividend Yield Ratio
(0)

Ratios: Return on Equity (ROE)
(0)

Ratios: DuPont Model for Return on Equity (ROE)
(0)

Ratios: Free Cash Flow
(0)

Ratios: Price-Earnings Ratio (PE Ratio)
(0)

Ratios: Book Value per Share of Common Stock
(0)

Ratios: Cash to Monthly Cash Expenses
(0)

Ratios: Cash Return on Assets
(0)

Ratios: Economic Return from Investing
(0)

Ratios: Capital Acquisition Ratio
(0)

15. GAAP vs IFRS(0)

GAAP vs. IFRS: Introduction
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GAAP vs. IFRS: Classified Balance Sheet
(0)

GAAP vs. IFRS: Recording Differences
(0)

GAAP vs. IFRS: Adjusting Entries
(0)

GAAP vs. IFRS: Merchandising
(0)

GAAP vs. IFRS: Inventory
(0)

GAAP vs. IFRS: Fraud, Internal Controls, and Cash
(0)

GAAP vs. IFRS: Receivables
(0)

GAAP vs. IFRS: Long Lived Assets
(0)

GAAP vs. IFRS: Liabilities
(0)

GAAP vs. IFRS: Stockholders' Equity
(0)

GAAP vs. IFRS: Statement of Cash Flows
(0)

GAAP vs. IFRS: Analysis and Income Statement Presentation
(0)

14. Financial Statement Analysis

Ratios: Quality of Earnings Ratio

14. Financial Statement Analysis

Ratios: Quality of Earnings Ratio: Videos & Practice Problems

Video Lessons Practice Worksheet

Ratios: Quality of Earnings Ratio Practice Problems

20 problems

Problem 1Multiple Choice

What does the quality of earnings ratio measure?

Problem 2Multiple Choice

How does accrual accounting affect the alignment between income and cash flow?

Problem 3Multiple Choice

What potential problem arises when there is a significant disconnect between booked revenues and actual cash received?

Problem 4Multiple Choice

If a company has a net cash flow from operating activities of \$200,000 and a net income of \$250,000, what is the quality of earnings ratio?

Problem 5Multiple Choice

What does a low quality of earnings ratio imply about a company's financial health?

Problem 6Multiple Choice

Why is transparency in financial information important for assessing earnings quality?

Problem 7Multiple Choice

How can one-time gains affect the perceived quality of earnings?

Problem 8Multiple Choice

What is channel stuffing and how does it affect earnings quality?

Problem 9Multiple Choice

A company reports a significant increase in net income due to a large sale at the end of the fiscal year. However, the cash flow statement shows no corresponding increase in cash. What might this indicate?

Problem 10Multiple Choice

A company has a net income of \$500,000 and net cash flow from operating activities of \$400,000. Calculate the quality of earnings ratio and analyze what this indicates about the company's earnings quality.

Problem 11Multiple Choice

Which of the following best describes the purpose of the quality of earnings ratio?

Problem 12Multiple Choice

In accrual accounting, when is revenue typically recognized?

Problem 13Multiple Choice

What might a consistent pattern of high net income but low cash flow from operations suggest about a company's earnings quality?

Problem 14Multiple Choice

A company reports a net income of \$300,000 and net cash flow from operating activities of \$270,000. What is the quality of earnings ratio?

Problem 15Multiple Choice

What does a high quality of earnings ratio indicate about a company's financial health?

Problem 16Multiple Choice

What role does completeness play in assessing the quality of earnings?

Problem 17Multiple Choice

How might a company use one-time gains to manage earnings?

Problem 18Multiple Choice

Why is channel stuffing considered a manipulation of earnings quality?

Problem 19Multiple Choice

A company reports a large increase in revenue at the end of the year, but its accounts receivable also increase significantly. What might this suggest?

Problem 20Multiple Choice

A company has a net income of \$600,000 and net cash flow from operating activities of \$540,000. Calculate the quality of earnings ratio and discuss what this indicates about the company's earnings quality.

Ratios: Profit Margin Practice Problems Ratios: Inventory Turnover Practice Problems

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