Builders Guide to Accounting Revised
Table of Contents

Introduction | Preview A Chapter | Back Cover

Section One
Sales and Accounts Receivable, 5

1 Why Keep Records? 7

The Records You Need, 8
Using a Computer, 13
Income Taxes, 13
Forms, 14
Double-Entry Bookkeeping, 14
Test Questions, 20

2 Accounting Methods, 21

Percentage-of-Completion Method, 21
Completed-Contract Method, 23
Percentage-of- Completion/Capitalized Cost Method, 23
Which Method Should You Use? 23
Combined Accounting Methods, 24
Test Questions, 31

3 Cash and Charge Sales, 33

Recording Cash Sales, 33
Recording Charge Sales, 35
Accounts Receivable, 39
Test Questions, 46

4 Managing Receivables, 47

Track Your Receivables Trend, 47
Uncollectible Accounts, 49
Receivables As a Planning Tool, 51
Test Questions, 54

5 Bad Debt Procedures, 55

When Does an Account Become Uncollectible? 55
Journal Entries for Bad Debts, 56
Estimating Bad Debts, 56
Accounting for Bad Debts, 60
Test Questions, 61

6 Sales Records and Cash Budgeting, 63

Analyzing Sales Records, 63
Test Questions, 68

7 Sales Planning, 69

Before You Take on New Kinds of Work, 69
Analyze the Risk, 70
Test Questions, 74

8 Planning for Profits, 75

Analyzing the Relative Profits, 76
The Relationship Between Volume and Profit, 78
Guidelines for Dropping Low-Profit Business, 79
Test Questions, 81

Section Two
Costs and Expenses, 83

9 Check Writing and Recording, 85

Maintaining the Checkbook, 85
The Check Register, 89
Pegboard Check Registers, 92
Other Check-Writing Methods, 93
Paying Accounts Payable, 94
Multiple Businesses, 98
Test Questions, 100

10 Accounting for materials, 103

Materials Handling and Control, 103
Controlling Inventory, 107
Analyzing Materials and Inventory, 109
Test Questions, 111

11 Payroll Accounting, 113

Four Ways to Keep Payroll Records, 114
Time Cards, 11 5
Payroll Checks, 11 6
Accounting for Tax Liabilities, 120
Test Questions, 127

12 Overhead Expenses, l29

Variable and Fixed Overhead, 129
Budgeting Expenses, 132
General Ledger Accounts, 134
Recording Expenses, 137
Test Questions, 140

13 Equipment Records, 14

Classifying Fixed Assets, 144
Controls on Purchasing Equipment, 145
Depreciation, 149
Depreciation Methods, 151
Amortization, 156 Lease or Buy? 156
Sales and Trade-Ins, 157
Test Questions, 158

14 Cash Budgeting, 161

Testing the Cash Position, 162
Preparing a Cash Budget, 163
Cash Control, 167
Test Questions, 171

15 Cost and Expense Records, 173

Objectives of the Cost System, 174
Scheduling Costs and Expenses, 175
Control of Deferred Costs, 176
Test Questions, 179

16 Accounting for Costs and Expenses, 181

Accounting for Direct Labor, 182
Accounting for Material and Subcontracts, 184
Accounting for Overhead, 184
Accounting for Completed-Contract Expenses, 186
Test Questions, 189

17 Petty Cash Funds, 191

Imprest System, 192
Test Questions, 195

18 Balancing the Checking Account, 197

The Ten Steps to Accurate Reconciliation, 197
Keeping Track of Your Balance, 202
Test Questions, 204

19 Accounting for Estimates, 205

Job Completion Schedules, 206
The Estimate, 207
The Next Step - Controlling Costs, 210
Test Questions, 211

Section Three
Financial Statements, 213

20 Recording Before the Event, 215

Accounts Receivable, 216
Prepaid Expenses, 216
Deferred Assets, 219
Provision Accounts, 219
Test Questions, 221

21 Financial Statements, 223

The Three Financial Statements, 223
The Trial Balance, 226
Balance Sheet Accounts, 227
Equity Account, 229
Income Statement Accounts, 229
Test Questions, 231

22 Using Financial Information, 233

Apply Financial Information, 234
Using Financial Information, 236
Test Questions, 238

23 Financial Ratios, 239

Balance Sheet Ratios, 240
Combined Ratios, 242
Income Account Ratios, 244
Presenting Ratios, 244
Comparative Ratio Analysis, 245
Test Questions, 246

24 Putting Together a Statement, 247

The General Ledger, 248
The Trial Balance, 251
Balance Sheet, 253
Income Statement, 254
Closing the Books, 254
Test Questions, 256

25 Comparative Period Statement, 257

Comparative Balance Sheets, 257
Comparative Income Statements, 259
Using Comparative Data, 261
Test Questions, 264

26 Restatements by Accounting Methods, 267

The Restated Income Statement, 267
Cash Accounting, 269
Test Questions, 271

27 Statements by Job, 273

Plotting Job Progress, 274
Long-Range Job Planning, 276
Test Questions, 279

28 Statements for Loan Applications, 281

What Is a Loan? 281
Loan Appli6ations, 282
Small Business Administration, 284
Test Questions, 287

Appendix, 289

The Chart of Accounts, 291
Complete Financial Statements, 295
Expanding & Automating the Accounting System, 303
Income Tax Planning, 309
Answers to Test Questions, 313

Index, 315

Introduction | Preview A Chapter | Back Cover