Category: Financial Accounting Review

STOCKHOLDERS’ EQUITY Accounting for Equity Transactions 1. Issuance of common stock: Par value portion is recorded in common stock. Price over the par value is

CURRENT LIABILITIES Accounting for Current Liabilities 1. Current liabilities: Liabilities that are expected to be paid within a year or normal operating cycle, whichever is

Noncurrent assets are the assets that are expected to be converted into cash after a year or normal operating cycle, whichever is longer. Noncurrent assets

Property, plant and equipment include the assets that are expected to be used in operations for more than a year. Assets classified as property, plant

Depreciation is the process of allocating the cost of property, plant and equipment over the life of the asset. Depreciation method should be rational and

Gain or Loss on Disposal 1. If disposal price is higher than the carrying amount of the asset, gain on disposal is recognized. 2. If