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What is intermediate accounting?
Intermediate Accounting is a course of study in financial accounting. In traditional universities, it is often taught in a two-semester sequence. The students majoring in accounting are required to take this subject, usually during their junior year.
Intermediate accounting is the next step in learning financial accounting after one has studied and mastered accounting basics. It covers essential topics like debits and credits, the concept of double entry accounting cycle and accounting equation, T accounts, and basic rules on how to account for business.
In intermediate accounting, you learn about current liabilities and long-term liabilities. A liability is an amount of money that one business owes to another. Current liabilities are the amounts that you need to pay within a year.
Why study Intermediate Accounting?
Intermediate accounting is a very important subject as it delves deep into the more complex, more challenging aspects of accounting practices. It covers topics and accounting situations that go beyond the basics, including the following:
Time value of money
Intermediate accounting involves advanced time value issues, such as deferred annuities and long-term bonds.
- Annuities are multiple payments over a period of time that you either make or receive.
- Deferred annuities are a type of annuity contract that delays payments to the investor until the investor elects to receive them.
- Long-term bonds are bonds a business holds in another company that extends out more than twelve months into the future.
Accounting for retail inventory
Inventory cost-flow assumptions are a big topic in financial accounting. An exciting expansion on this topic in intermediate accounting is accounting for retail inventory.
The retail inventory method uses a cost ratio to convert the ending inventory valued at retail to cost.
Accounting for property, plant, and equipment
Intermediate accounting gets into the nitty-gritty of accounting for an involuntary conversion such as theft. When this happens, a company has to record the difference between insurance proceeds and the asset’s net book value as gain or loss on disposal of the asset.
Research and development expenses (R&D)
Intermediate accounting shows you how to handle the costs of R&D, such as when a drug company is developing a product to bring to market.
Accounting for income taxes
Intermediate accounting covers how to calculate the difference between financial and tax accounting. A significant difference between the two is financial and tax depreciation. Financial depreciation takes the long-way home, while tax depreciation takes the shortcut through the vacant lot! So net income between the two will differ.
Importance of Intermediate Accounting
Intermediate accounting is very important for accounting majors as it serves as the basis for their future accounting coursework. Obviously, it is of great importance that students entering Intermediate Accounting are adequately prepared for the course.
It is designed to discuss the theoretical foundation of financial accounting, fundamental issues related to measurement, reporting of financial statements, and disclosure issues related to current assets. Also, the course in Intermediate Accounting provides information relating to revenue recognition.
Students majoring in Intermediate Accounting learn how to explain and generate financial statements. As a result, they will be able to comprehend a wide range of financial and managerial concepts and procedures. In addition, this degree also provides students with the necessary basis for studying for the Certified Public Accountant exams. It also prepares them for a number of other professions like Finance, education, real estate, and health care administration.
Many people assume Intermediate accounting is a one-dimensional field. However, as technology advances and businesses become more complex, the role of intermediate accountants is dynamic. Intermediate Accountants are no longer number crunchers. They are strategic advisors that have a bottom-line impact on the health of a business. It’s no surprise that the demand for accountants will continue to grow.
Accounting is not a profession that’s going away anytime soon. Virtually every business needs an accountant or the services of an external accounting firm, and even the average person has reasons to hire an accountant from time to time. As long as people need help with taxes and businesses exist, there will be a need for accountants.
Test Bank Resources
In order to learn intermediate accounting, you should take an intermediate accounting course, purchase a workbook, comprehend liabilities, understand cash flow, analyze financial statements, take notes and do practice problems. You can buy test banks in intermediate accounting. “Test bank for intermediate accounting 15th edition by kieso” is a comprehensive resource book for preparing intermediate accounting.
The bestselling book on intermediate accounting, Kieso, is an excellent reference for practicing accountants and an invaluable resource for anyone entering the field. They’ll learn how to leverage everyday accounting programs like Excel, GLS, and other computerized accounting software, giving them a strong background in the tools needed in the accounting profession.
The scope of the Intermediate Accounting course is broad: to cover, in considerable detail, the accounting concepts, policies, and practices for most types of economic transactions of businesses. Over time, the scope of intermediate accounting has widened.
Intermediate accounting covers fundamental topics like debits and credits, the concept of double entry accounting cycle and accounting equation, T accounts, and basic rules on how to account for business.