CHS Accounting II

PA Academic Standards for  Business, Computer and Information Technology:

• 15.1.12.M. Analyze and calculate gross pay and net pay, including regular and overtime wages, commission, and piece rate. 

National Standards for Business Education

• Explain the employer’s responsibility in reporting payroll records through federal tax forms.
• Explain common methods of paying compensation (e.g., hourly, salary, commission, independent contractor) and the financial and tax implications of each.
• Calculate net pay and the employer’s payroll taxes.
• Prepare payroll reports.
• Record payroll-related transactions (e. g., payroll payment, accrued payroll, payroll taxes).

• The payroll process.
• Forms associated with payroll such as a W-4, W-2, and Form 941..
• Required tax withholdings for both the employee and the employer.

• The payroll process involves calculating and distributing wages to employees for their work during a specific pay period. It includes tracking employee hours, determining gross pay, applying deductions such as taxes and benefits, and issuing net pay. This process also requires accurate recordkeeping and compliance with labor and tax laws to ensure both legal and financial integrity.
• Payroll involves several important forms to document income and tax obligations. Common forms include the W-4, used by employees to determine federal tax withholding; the W-2, which reports annual wages and tax information to employees and the IRS; and Form 941, used by employers to report quarterly federal payroll taxes. These forms help maintain transparency and ensure compliance with federal and state regulations.
• Both employees and employers are responsible for payroll tax withholdings. Employees have taxes such as Federal Income Tax (FIT), State Income Tax (SIT), Social Security, and Medicare withheld from their paychecks. Employers must also contribute matching amounts for Social Security and Medicare, and pay additional taxes such as Federal Unemployment Tax (FUTA) and State Unemployment Tax (SUTA). Proper calculation and timely submission of these taxes are crucial for legal compliance.

• Compile and record employee time, production, and payroll data from time sheets and other records.
• Record employee information to maintain payroll records.
• Calculate benefits including sick pay, vacation time, and personal time.
• Compute wages, taxes (FIT, SIT, FICA, Medicare), other deductions, and net pay.
• Complete and file payroll tax forms and returns. 
• Explain the types of crimes often associated with businesses and organizations.
• Process employee compensation using various payment methods.
• Journalize payroll at the end of the earnings period in the appropriate journals.
• Journalize payment of period payroll taxes.

•  What are the employer's responsibilities when paying their employees?
   

• How is accurate employee time and production data collected and recorded for payroll processing?
• What essential employee information must be documented and maintained for payroll purposes?
• How do different types of taxes and deductions affect employee paychecks?
• What are the key payroll tax forms, and when must they be completed and filed?
• Why is it necessary to journalize payroll at the end of each earnings period?
• What is the process for recording the payment of payroll taxes in accounting records?
• What types of crimes are commonly associated with businesses and organizations, and how can they be identified, prevented, and addressed within a professional environment?
   

• Century 21 Accounting, Mindtap software, YouTube, Schoology, computer
   

• Salary expense
• Federal unemployment tax
• State unemployment tax
• W-2
• W-4
• Deposit
• Form 941
• Lookback period

• Formative - theory and application
• Summative Assessments
   

PA Academic Standards for  Business, Computer and Information Technology:

• 15.1.12.Y. Determine and calculate taxable income and tax liability for both personal and business taxes. 
• 15.1.12.G. Analyze and journalize transactions involving short- and long-term liabilities.
• 15.1.12.F. Analyze and journalize transactions for short- and long-term assets. 
• 15.1.12. O. Compare and contrast the accrual basis and the cash basis of accounting; assess the impact of each on the financial statements.

National Standards for Business Education

• Explain the accounting methods used to determine the value of accounts receivable to be reported on the balance sheet and describe the effect on the income statement.
• Record transactions for accounts receivable, including uncollectible accounts, write-offs, and recoveries.
• Differentiate between periodic and perpetual inventory and describe inventory valuation methods and their complexity. 

• The impact of uncollectible accounts.
• Promissory notes.
• Adjusting entries are needed to update the general ledger.
• Methods to calculate federal income tax.
   

• Uncollectible accounts, also known as bad debts, represent amounts owed by customers that a business is unable to collect. These accounts reduce the company's assets and can negatively affect profitability. Businesses must estimate and record these losses to present a more accurate picture of financial health and comply with the matching principle in accounting.
• A promissory note is a written, legally binding agreement in which one party promises to pay a specific sum of money to another party, either on demand or at a future date. These notes often include interest terms and maturity dates and are used as a formal method of financing. Businesses may issue or receive promissory notes and must record them accurately to reflect financial obligations or receivables.
• Adjusting entries are made at the end of an accounting period to ensure that revenues and expenses are recorded in the correct period. These entries account for items such as accrued expenses, unearned revenue, depreciation, and prepaid items. Proper adjusting entries are essential for producing accurate financial statements in accordance with the accrual basis of accounting.
• Federal income tax can be calculated using different methods, such as the percentage method or the wage bracket method, both provided by the IRS. Employers use these methods, along with information from an employee’s Form W-4, to determine how much tax to withhold from each paycheck. Choosing the correct method ensures accurate withholdings and compliance with federal regulations.

• Analyze promissory notes.
• Adjust for bad debts using the direct write-off or allowance method.
• Prepare an unadjusted trial balance.
• Adjust supplies, prepaid insurance, merchandise, interest receivable, and accumulated depreciation.
• Adjust the federal income tax payable.
• Prepare an adjusted trial balance.

• How should a business account for and manage unpaid customer balances or uncollectible accounts?
• In what ways do adjusting entries impact the accuracy and completeness of a company's financial records?
• What methods and regulations do businesses use to determine federal income tax obligations?

• What is a promissory note, and how is it used in business transactions?
• What are the differences between the direct write-off method and the allowance method for bad debts?
• What is the purpose of an unadjusted trial balance, and how does it help in the accounting cycle?
• How do these adjustments ensure that financial statements reflect accurate and current financial information?
• How is federal income tax payable adjusted at the end of an accounting period?
• What is the purpose of an adjusted trial balance in the accounting cycle?
   

• Century 21 Accounting, Mindtap software, YouTube, Schoology, computer
   

• Unadjusted trial balance
• Beginning inventory
• Ending inventory
• Accrued revenue
• Accrued interest income
• Current assets
• Plant assets depreciation
• Depreciation expense
• Salvage value
• Useful life
• Straight-line method of depreciation
• Accumulated depreciation
• Book value of a plant asset   
• adjusted trial balance
• tax bracket
• marginal tax rate
• Uncollectible accounts
• Allowance method
• Book value
• Book value of accounts receivable
• Net realizable value
• Percent of sales method
• Percent of accounts receivable method
• Aging of accounts receivable
• Writing off an account
• Direct write-off method
• Promissory note
• Note payable
• Note receivable
• Maker of a note
• Payee
• Principal
• Interest rate
• Maturity date
• Time of a note
• Maturity value
• Interest income
• Dishonored note

Formative - theory and application
Summative Assessments
 

PA Academic Standards for  Business, Computer and Information Technology:

• 15.1.12.R. Explain the primary areas of analysis (trend analysis, profitability, liquidity, capital structure) and the information that can be obtained from each. 
• 15.1.12.Q. Prepare financial statements (including a Balance Sheet, Profit & Loss and Owner’s Equity) and understand their relevance. 
• 15.1.12.S. Analyze and perform a horizontal and vertical analysis of the income statement and balance sheet. 
• 15.1.12.T. Assess profitability, liquidity, and solvency by calculating and interpreting financial ratios. 
• 15.1.12.U. Assess capital structure by calculating and interpreting financial ratios. 
• 15.1.12.V. Analyze and explain the use of industry averages in assessing the financial condition, operating results, profitability, liquidity, and capital structure. 

National Standards for Business Education

• Analyze financial statements using computerized spreadsheets.

• The importance of the income statement, balance sheet, and statement of owners’ equity.
• Closing entries and their impact on financial statements.
• Vertical and horizontal analysis of financial statements.

• The income statement, balance sheet, and statement of owners’ equity provide a comprehensive overview of a business’s financial performance and condition. These statements are essential for evaluating profitability, financial stability, and changes in ownership equity over time.
• Closing entries are used to transfer the balances of temporary accounts to permanent accounts at the end of an accounting period. This process ensures accurate financial reporting and prepares the general ledger for the next period’s transactions.
• Vertical analysis expresses financial statement items as a percentage of a base amount, making it easier to assess internal relationships within a single period. Horizontal analysis compares financial data over multiple periods to identify trends, growth patterns, and potential concerns.

• Prepare an income statement for a merchandising business organized as a corporation.
• Prepare a statement of stockholders’ equity.
• Prepare a balance sheet for a business organized as a corporation.
• Prepare closing entries.
• Prepare a post-closing trial balance.
• Analyze component percentages on the income statement (vertical analysis).
• Perform various ratio analyses on the balance sheet and income statement.
• Prepare a horizontal analysis on the income statement and balance sheet.
• Manage multiple worksheets and workbooks.
   

• How do businesses prepare and interpret financial statements to accurately reflect their financial position, performance, and changes in equity within a corporate structure?
• How can financial analysis tools—such as vertical, horizontal, and ratio analysis—be used to evaluate a corporation’s financial health and inform decision-making?
   

• How is an income statement structured for a merchandising corporation, and what key elements differentiate it from a service business?
• What information is included in the statement of stockholders’ equity, and how does it reflect changes in ownership interest?
• In what ways do assets, liabilities, and equity interact to reflect a corporation’s financial health?
• What is the purpose of closing entries in the accounting cycle, and which accounts are affected?
• What role does the post-closing trial balance play in the accounting cycle?
• How is vertical analysis used to assess the relationship of individual income statement items to total sales or revenue?
• What key financial ratios are used to evaluate a company’s liquidity, profitability, and solvency?
• How does horizontal analysis help identify financial trends over multiple periods?
   

• Century 21 Accounting, Mindtap software, YouTube, Schoology, computer
   

• Operating revenue
• Net sales
• Cost of merchandise sold
• Gross profit
• Operating expenses
• Income from operations
• Statement of stockholders’ equity 
• Par value
• Current liabilities 
• Long-term liabilities
• Supporting schedule
• Profitability ratio
• Benchmark
• Comparative financial statements
• Trend analysis
• Profit margin
• Gross margin
• Operating margin
• Operating expense ratio
• Solvency ratio
• Debt ratio
• Horizontal analysis
• Earnings per share
• Market ratio
• Dividend yield
• PE Ratio
• Liquidity ratio
• Working capital
• Current ratio
• Quick assets
• Quick ratio

• Formative - theory and application
• Summative Assessments
• Simulation
   

PA Academic Standards for  Business, Computer and Information Technology:

• 15.1.12.I. Differentiate between and journalize entries for issuance or repurchase of stock and the declaration and payment of dividends. 
• 15.1.12.H. Identify, calculate, and record depreciation, depletion, and amortization; explain their effect on the financial statements. 

National Standards for Business Education

• Explain the criteria used to distinguish between capital expenditures (recording an asset) and revenue expenditures (recording an expense).
• Record transactions for long-term debt instruments.
• Explain why businesses issue bonds and why they are issued at a discount or premium. 
• State the different classes of stock and explain the rights afforded to each class of stock.
• Determine the costs of property, plant, equipment, natural resources, and intangible assets.
• Calculate and record depreciation and explain the impact on the financial statements.
• Determine the effect on the financial statements when assets are sold, disposed of, or rendered obsolete.

• Various depreciation methods such as straight-line and declining balance.
• Plant assets and how they impact financial statements.
• Intangible assets and how they impact financial statements.
• Debit Financing and its implications on a corporation.
• Equity Financing and its implications on a corporation.

• Depreciation methods such as straight-line and declining balance allocate the cost of a plant asset over its useful life. Each method affects the timing and amount of expense recognized, impacting net income and asset valuation on financial statements.
• Plant assets, including buildings, machinery, and equipment, are long-term tangible assets used in operations. Their acquisition, depreciation, and disposal influence a company's balance sheet, income statement, and overall financial health.
• Intangible assets, such as patents, copyrights, and trademarks, lack physical substance but provide future economic benefits. They are recorded at cost and amortized over time, impacting both the asset section of the balance sheet and periodic expenses on the income statement.
• Debt financing involves borrowing funds through instruments like loans or bonds, which must be repaid with interest. While it can increase financial leverage and fund growth, it also introduces fixed obligations that affect cash flow and financial risk.
• Equity financing raises capital by issuing shares of stock, giving investors ownership in the company. This method does not require repayment; however, it dilutes existing ownership and may impact control and dividend expectations.

• Calculate depreciation using various methods such as straight-line and declining balance.
• Identify available sources of debt financing.
• Journalize transactions related to short-term and long-term debt financing.
• Journalize transactions related to equity financing.
• Identify factors influencing financing decisions.
• Analyze the impact of financial leverage.
• Analyze and record buying plant assets.
• Analyze and record selling plant assets.
• Record the buying of intangible assets.

• How do businesses evaluate and choose between debt and equity financing options, and what are the financial implications of each?
• How are long-term operational assets—such as plant and intangible assets—accounted for, and what effect do these transactions have on a company’s financial statements?

• What distinguishes short-term from long-term debt, and how does each impact a company's financial position?
• In what ways does equity financing differ from debt financing in terms of ownership and financial obligations?
• What internal and external factors influence a company's choice between debt and equity financing?
• What are the potential advantages and disadvantages of using debt to finance business operations?
• What considerations must be made when acquiring plant assets, and how are these transactions recorded?
• What steps are involved in accounting for the sale of plant assets, and how is gain or loss recognized?
• How are intangible assets acquired and recorded in the accounting system?
   

• Century 21 Accounting, Mindtap software, YouTube, Schoology, computer
   

• ROI
• Real property 
• Personal property
• Assessed value
• Plant asset record gain
• Gain on plant assets
• Loss
• Loss on plant assets
• Accelerated depreciation
• Declining-balance method of depreciation
• Double-declining-balance method of depreciation
• Intangible asset
• amortization
• Revenue expenditure
• Debt financing
• Line of credit
• Prime interest rate
• Interest expense
• Non-operating expenses and capital expenditures
• Collateral
• Bond
• Bond issue
• Stated interest rate
• Equity financing
• Par value
• Issue date
• Preferred stock
• Cost of capital
• Financial leverage

• Formative - theory and application
• Summative Assessments
   

PA Academic Standards for  Business, Computer and Information Technology:

• 15.1.12.J. Analyze the various methods for maintaining and valuing inventory (FIFO, LIFO, etc.) and describe their effect on financial statements.

National Standards for Business Education

• Differentiate between periodic and perpetual inventory and describe inventory valuation methods and their complexity. 
• Determine the cost of inventory for merchandising and manufacturing businesses and apply appropriate valuation methods.

• Periodic vs perpetual inventory method.
• First-in, first-out inventory costing method.
• Last-in, first-out inventory costing method.
• Weighted average inventory costing method.
   

• The periodic inventory method updates inventory balances and cost of goods sold at the end of an accounting period through a physical count. In contrast, the perpetual method continuously tracks inventory in real time, providing more accurate and timely inventory data.
• The FIFO method assumes the earliest goods purchased are the first to be sold, resulting in older costs being matched with current revenues. This typically leads to lower cost of goods sold and higher net income during periods of rising prices.
• The LIFO method assumes the most recently purchased inventory is sold first, matching newer costs with current revenues. In times of inflation, this results in higher cost of goods sold and lower taxable income, potentially reducing income taxes.
• The weighted average method calculates the cost of inventory based on the average cost of all units available for sale during the period. This method smooths out price fluctuations and provides a balanced approach to valuing inventory and cost of goods sold.

• Calculate the cost of goods sold using various costing methods (FIFO, LIFO, and weighted average).
• Estimate the cost of merchandise inventory using the gross profit method of estimating inventory.

• How do businesses use various inventory costing and estimation methods to determine the cost of goods sold and assess the value of ending inventory, and what are the financial implications of these choices?
   

• How do different inventory costing methods (FIFO, LIFO, and weighted average) impact the calculation of cost of goods sold and net income?
• How is the gross profit method used to estimate ending inventory, and in what situations is it most appropriate?
   

• Century 21 Accounting, Mindtap software, YouTube, Schoology, computer
   

• Inventory record
• Stock record
• Stock ledger
• FIFO
• LIFO 
• weighted-average inventory cost method
• Market value
• Lower of cost or market inventory costing method
• Gross profit method of estimating inventory

• Formative - theory and application
• Summative Assessments
   

PA Academic Standards for  Business, Computer and Information Technology:

• 15.1.12. O. Compare and contrast the accrual basis and the cash basis of accounting; assess the impact of each on the financial statements.
• 15.1.12.W. Analyze business activities using cash flow statements. 

National Standards for Business Education

• Prepare basic financial statements (e.g., income statement, balance sheet, cash flow statement).

• Accrual vs deferral transactions. 
• Reversing entries.
• The cash flow statement and its sections.

• Accrual transactions recognize revenues and expenses when they are earned or incurred, regardless of when cash is exchanged, ensuring financial statements reflect true economic activity. Deferral transactions, on the other hand, postpone revenue or expense recognition until a later period when the related cash flow is realized or consumed, maintaining the accuracy of period reporting.
• The cash flow statement summarizes a company’s cash inflows and outflows over a period, categorized into operating, investing, and financing activities. Each section provides insight into different aspects of a business’s financial health—operating activities show core business performance, investing reflects asset purchases or sales, and financing reveals how the company raises and repays capital.
   

• Record the reversing entry for accrued revenue.
• Record an entry to receive payment on a note receivable with accrued interest.
• Calculate accrued interest expense.
• Record adjusting and reversing entries for an accrued expense.
• Record an entry to pay an installment on a note payable and accrued interest.
• Record an entry to receive cash on deferred revenue.
• Record an entry to pay cash on a deferred expense.
• Prepare and analyze a statement of cash flows for a merchandising business organized as a corporation.
   

• How do businesses use adjusting and reversing entries to accurately reflect accrued revenues and expenses, and what is the impact on financial reporting?
• How do companies account for deferred revenues and deferred expenses to ensure accurate financial statements and informed decision-making?
• What are the components of the statement of cash flows, and how does it help evaluate the financial health and cash position of a merchandising corporation?
   

• Why are reversing entries for accrued revenues necessary, and how do they simplify accounting in the new period?
• How is the collection of a note receivable with accrued interest properly recorded, and what accounts are affected?
• How is accrued interest expense calculated, and why must it be recognized at the end of an accounting period?
• What is the purpose of adjusting and reversing entries for accrued expenses, and how do they ensure accurate financial reporting?
• How are installment payments on a note payable, including accrued interest, recorded to reflect both principal and interest expense?
• How is deferred (unearned) revenue recognized and recorded when cash is received in advance of providing goods or services?
• How are prepaid or deferred expenses recorded when cash is paid in advance, and how are they later recognized as expenses?
• What are two methods of creating the operating section of the cash flow statement?
• How does the cash flow statement help to evaluate the financial health of a business?
   

• Century 21 Accounting, Mindtap software, YouTube, Schoology, computer
   

• Accrual
• Deferral 
• Reversing entry
• Accrued expenses
• Accrued interest expense
• Deferred revenue
• Deferred expenses
• cash flow
• Statement of Cash Flows
• Operating activities
• investing activities
• financing activities

• Formative - theory and application
• Summative Assessments