ACCT 2010 Final Exam Review Sheet PDF

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Accounting 2010 Final Exam Review Topics Chapter 1—Financial Statements  What does GAAP mean and what body creates financial accounting standards?  Know the underlying concepts, assumptions, and principals of accounting.  What information does each of the four required financial statements provide about a company? Chapter 2—Transaction Analysis  Understand the Accounting Equation (types of accounts).  Understand what assets, liabilities, revenue, & expense accounts are.  Understand the different accounts that relate to various assets, liabilities, etc.  Know the normal account balances of all general ledger accounts.  Understand what increases and decreases general ledger accounts.  Be able to create journal entries to record different types of transactions.  Be able to analyze the impact of transactions on the accounting equation.  Understand the use of the Trial Balance. Chapter 3—Accrual Accounting & Income  Know the difference between cash & accrual based accounting.  Understand the revenue recognition principle and the expense recognition principle.  Understand the closing process including the preparation of adjusting entries.  Understand the process of closing the general ledger—which accounts are closed and which are not.  Know the financial statements required by GAAP and their formats. Chapter 4—Internal Control & Cash  What are the components of internal control?  Understand the process of reconciling a bank statement to the general ledger cash account balance. Chapter 5—Short-term Investments & Receivables  Understand GAAP for revenue recognition shipping terms, payment terms, sales discounts, and sales returns.  Be able to journalize transactions involving sales discounts and sales returns.  Understand the two methods of computing bad debts expense and the allowance for doubtful accounts.  Understand short-term notes receivable and the accrual of interest income at the end of accounting periods. Chapter 6—Inventory & Cost of Goods Sold  Understand when ownership of purchased item passes from buyer to seller.  Understand the two basic inventory systems—perpetual and periodic.  Understand FIFO, LIFO, and weighted average costs.  Understand the impact of inventory errors.  Understand the impact of rising or falling prices on LIFO and FIFO calculations and how that can impact the financial statements.

Chapter 7—Plant Assets, Natural Resources & Intangibles

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Understand the computation of the various depreciation methods covered in the course. Understand various costs that are included in the basis of assets purchased. Understand the difference between a capital expenditure and period expense. What is an intangible asset? Understand the journal entries needed to record the sale of assets. Understand how to journalize the purchase of multiple assets for a lump sum price. Understand the impact in a change in estimate while in the middle of an assets useful life.

Chapter 8—Current Liabilities     

Understand what constitutes current liabilities—known, estimated, and contingent liabilities. Be able to account for warranty liabilities Know how to account for short-term notes payable and how to accrue interest payable. Understand journalizing accounts payable transactions. Understand accrued liabilities such as sales tax payable, salary payable, unearned revenue, etc.

Chapter 9—Liabilities  Understand recording bond issuance, interest accrual, and retirements.  Be able to journalize bonds issuance at both a premium and a discount. Chapter 10—Stockholder’s Equity  Know the journal entries to record the issuance of corporate stock.  Understand the difference between common and preferred stock…par value, dividends, etc.  Be able to journalize the declaration and payment of cash dividends.  Understand cumulative and noncumulative preferred stock and how to compute dividends payment for those types of shares.  Understand the effects of Treasury stock transactions—both purchase, retirement and subsequent sale.  Be able to analyze and understand the stockholder equity accounts including paid-in capital and retained earnings.  Be able to differentiate between stock dividends and stock splits.  Understand the impact of stock dividends upon overall stockholder’s equity. Chapter 11—Income Statement, Statement of Comprehensive Income, & Stockholder Equity  Know how to compute earnings per share.  Evaluate quality of earnings.  Be able to format and prepare a multi-step income statement.  What are discontinued operations and how are they reported on the income statement? Chapter 12—Statement of Cash Flows  Know the various sections of the statement.  Be able to create the various sections of the statement.  Know the types of transactions that pertain to each of the sections of the statement.  Understand how changes in the various current assets & liabilities affect the adjustments to Net Income in the Operating Activities section of the statement.  Understand how changes in plant & equipment accounts can affect adjustments in the operating section of the statement.  Be able to analyze and identify positive and problematic items in the statement.

Note: Preparation of the Operating Activities section of the statement using the direct method is not covered in the course....