ACC 131 Finals Blitz
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1 ACC 131 Finals Blitz Note: This is just an overview of some key topics to understand. This is NOT a comprehensive list. Please consult your professor and/or class syllabus for more information on what material will be on your final exam. Chapter 1 1. Know definition of accounting and financial accounting 2. What is the purpose of financial accounting? 3. Know business formations a. Sole Proprietorship b. Partnership c. Corporation 4. Business Activities a. Financing b. Investing c. Operating 5. How to set up the four financial statements and the purpose of each a. Balance Sheet b. Income Statement c. Statement of Retained Earnings d. Statement of Cash Flows 6. Understand Assets = Liabilities + Stockholders Equity 7. Understand the relationship between the financial statements 8. Understand the basic accounts presented in a balance sheet Chapter 2 1. Understand the Conceptual Framework a. Qualitative Characteristics i. Relevance ii. Faithful Representation iii. Comparability iv. Verifiability v. Timeliness
2 vi. Understandability b. Assumptions i. Economic Entity ii. Continuity (Going Concern) iii. Time Period iv. Monetary Unit c. Principles i. Historical Cost ii. Revenue Recognition iii. Matching iv. Conservatism 2. Understand cost constraint (p.55) 3. Understand how to do basic journal entries and how they affect each financial statement 4. Understand the basics of the accounting cycle Chapter 3 1. Understand the differences between accrual accounting and cash basis accounting 2. Understand adjusting journal entries (see chart on p. 116) 3. What is an accrual vs. deferral? 4. Know how to classify an adjusting journal entry either as an accrual or a deferral 5. Know how to close the accounts Chapter 4 1. Understand what internal control is 2. Know the elements of internal control a. Control Environment b. Risk Assessment i. Strategic Risks ii. Business Process Risks c. Control Activities
3 i. Clearly Defined Authority and Responsibility ii. Segregation of Duties iii. Adequate Documents and Records iv. Safeguards over Assets and Records v. Checks on Recorded Amounts d. Information and Communication e. Monitoring i. The internal audit team 3. Understand basic cash controls 4. Know how to do a bank reconciliation and the vocab words 5. Petty Cash 6. The Operating Cycle (p. 189) Chapter 5 1. Understand revenue recognition a. Realized or realizable b. Earned 2. How to do sales discounts a. 2/10 net 30 i. This means the purchasing company gets a 2% discount if they pay within 10 days, but they have to pay their entire bill within 30 days. 3. Sales returns and allowances 4. Know the different types of receivables (p.220) 5. How to account for bad debt expense a. Direct Write Off b. Allowance Method i. Percentage of Credit Sales ii. Aging Method 6. How to account for notes receivables Chapter 6 1. Vocabulary a. Inventory
4 b. Cost of Goods Sold c. Gross Margin/Profit d. Merchandisers e. Retailers f. Wholesalers g. Raw Materials h. Work in Process i. Finished Goods 2. Know how to calculate Cost of Goods Sold 3. Perpetual v Periodic Inventory 4. Freight In Vs. Freight out 5. Inventory Costing Methods a. FIFO b. LIFO c. Average Cost d. Specific Identification 6. Understand theoretical differences between the four inventory costing methods Chapter 7 1. What is an operating asset? 2. What costs do we capitalize? a. See page 332 (the bowls picture)
5 3. Depreciation 4. Straight Line method a. Understand Useful life and residual value a. (Cost-Residual Value)/ Expected Useful life 5. Double declining balance 6. Units of production a. ((1/Useful life)*2) * Book Value of the asset a. Same equation as straight line except the denominator is changed (see p. 341) 7. Difference between capital vs. revenue expenditure 8. Intangible assets (p. 352) Chapter 8 1. What is a liability? 2. What is a current liability? 3. Know how to account for notes payable and their related interest. 4. Understand how to account for unearned revenue 5. Contingent liabilities (see exhibit 8-6 on page 398) Chapter 9 1. Understand what bonds are and how to account for them. 2. Refresh your memory by doing a few bond problems. Here are some good review problems: 9-29, 9-30, and 9-32
6 Chapter Understand authorized shares, issued shares, and outstanding shares 2. Preferred Stock vs. Common Stock (see comparisons on p. 470) 3. Understand additional paid-in capital (APIC) 4. Know the journal entries on how to issue stock a. Dr. Cash Cr. Common/ Preferred Stock 5. Understand what treasury stock is and that it is a reduction from Stockholder s equity 6. Understand how to account for dividends 7. Understand how Retained Earnings works a. Beg R.E. + Revenues - Expenses Dividends = End R.E.
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