Final Exam Topics PDF

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2018 Conrecode Final Exam Topics...

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Financial Accounting Final Exam Topics Chapter 10 (11/50) Know the terminology for shares (authorized, issued, unissued, outstanding, treasury) and be able to calculate them. Know how to record the issuance of stock with a par value (Common stock, additional paid in capital) Know the difference between paid in capital and additional paid in capital and know how to calculate both Know how treasury stock is recorded when purchased and reissued and how it affects stockholders’ equity and the other accounts Know the similarities and differences between a cash dividend, stock dividend and a stock split, and how to record them. Be able to determine the effects on retained earnings from stock transactions and other business activities…and know how to calculate retained earnings. Know the stockholders’ equity section on the balance sheet with the inclusion of paid in capital and treasury stock. Be able to find any missing amount. Comprehensive Section Only from chapters 1 – 8 Be able to identify the following for ANY account Type of Account FOR ANY ACCOUNT

Closing Status Closed Not closed

Asset Expense Liability Revenue Stockholders’ Equity Contra Accounts

Financial Statement(s) (On which reported) Income statement Statement of Stockholders’ Equity Balance Sheet Statement of Cash flow

Be able to perform transaction analysis: Transaction analysis is the process of studying a transaction to determine its economic effect on the entity in terms of the accounting equation (also known as the accounting model A = L + SE). Use transaction analysis as described in chapter 2 of the text and course packet. The accounting model should always remain in balance. We have used the transaction analysis model throughout the semester to help understand accounting transactions. Adjusting entries Be able to identify adjustments and which accounts are adjusted, such as: EXAMPLE: At the end of its accounting period, December 31, 20D, May Corporation owed $1,000 for property taxes which had not been recorded or paid. Therefore, the 20D, adjustment should be: ACG-2021

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Final Exam Topics

$1,000 increase to a liability account and $1,000 increase to an expense account. Note:  Each adjustment affects one balance sheet account and one income statement account.  The purpose of an adjustment is to make sure all expenses, revenues, assets and liabilities have been recognized prior to preparing the financial statements.  Failure to record an adjustment will cause both the income statement and the balance sheet to be improperly stated. If May Corporation had failed to record the $1,000 adjustment at the end of 20D, liabilities would have been understated, stockholders’ equity would have been overstated, expenses would have been understated and net income would have been overstated.

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Know the order the financial statements are prepared

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Know why we do CLOSING entries

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Know how to classify assets and liabilities on a classified balance sheet (current versus noncurrent).

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Know the revenue recognition principle (EARNED) and how to apply it

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Know the matching principle (expense recognition) and how to apply it

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Cash flow items classification: Operating, Investing or Financing

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Be able to find any missing amount on the balance sheet

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Be able to find any missing amount on the income statement

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Know and be able to use the cost of goods sold equation

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Know how to calculate the current ratio (CA/CL)

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Know how to calculate gross profit ratio AND profit margin (net profit margin)

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Know how to do straight line deprecation; to find depreciation expense, accumulated depreciation and book value…and the purpose of depreciating an asset.

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Know WHY we depreciate fixed assets.

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Be able to calculate interest expense or interest revenue (P x R x T).

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Know the statement of stockholders equity and be able to find missing amounts

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Know the statement of retained earnings and be able to determine any missing amounts.

ACG-2021

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Final Exam Topics

Financial Statements Know the order the financial statements are prepared, their equations (both simple and more complex) and be able to solve for any unknown. Income Statement Sales - SR&A (and other XR) Net sales -COGS =GP -operating expenses = operating income +/-gains/losses/other rev/exp = income before tax (IBT) -income tax expense =NI

OR, without gains/losses/other rev or exp.

OR, without XR, gain/losses/ other rev or exp.

Sales - SR&A (and other XR) Net sales -COGS =GP -operating expenses = operating income or IBT -income tax expense =NI

Net sales -COGS =GP -operating expenses = operating income or IBT -income tax expense =NI

OR, without XR, gain/losses/ other rev or exp. and taxes: Sales -COGS =GP - operating expenses = operating income

Cost of Goods Sold BI +P =GAFS -EI =COGS Statement of Retained Earnings BRE + NI - Dividends = ERE

Statement of Stockholders’ Equity

Balance Sheet Accounting Equation

Balance Sheet Assets = Liabilities + Stockholders’ Equity Current Assets + Non current Assets

A = L + SE

= Total Assets

ACG-2021

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=

Current Liabilities + Non current liabilities = Total Liabilities Common Stock + Additional paid in capital = Paid-In Capital + Retained Earnings - Treasury Stock = Total Stockholders’ Equity =Total Liabilities & SE

Final Exam Topics...