Accounting for Managers

Stockholders’ equity
The amount of financing provided by owners
of the business and operations.
Know What You’re Signing
Some asset accounts, used in daily operations, help to
generate revenue.These assets, bought in one accounting
period, are either not used or not completely used by the end of the
accounting period.The revenue coming from those assets should be
reconciled. Managers are often asked to sign and take responsibility for
the truth of financial statements.
If you have to sign adjusting entries, determine the rationale for the
treatment and the impact it will have on the financial statements.This
particular area of matching revenue and expenses to the correct
accounting period has been subject to abuse. It now draws more
scrutiny. Managers should understand the GAAP principles behind
adjusting entries and how they are entered.
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matched with expenses that help cause that revenue. That way,
external users will have a more accurate picture of profitability. 
The accrual accounting setup provides for accounts to carry
amounts into the future and then peel off as they enter the
applicable period. 
Accounting for Managers
60
Current Assets
Cash
Accounts Receivable
Marketable Securities
Inventory
Prepaid Expenses
Assets
Liabilities
Total Current Assets
350,000
500,000
68,000
444,400
15,000
1,377,400
Current Liabilities
Accounts Payable
Notes Payable
Accrued Expenses
Income Taxes Payable
580,000
199,000
95,000
43,400
Long-Term Liabilities
Deferred Taxes
Long-Term Debt
350,000
2,000,000