accounting final exam study guide

xfltenq2019
timer Asked: Apr 26th, 2015

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Final Exam Study guide.docx 

i need help with this final exam study guide. i need to expand on what is written here and maybe include an example or 2 for each part. any help would be appreciated

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Final Exam Study Guide The following list is intended to help you focus your study efforts on those key topics covered in the final exam. • • • • • • • • • • • • • • • • • • Understand the difference between financial and managerial accounting and that managerial accounting focuses on the data needs of internal managers while financial accounting provides information to both internal and external stakeholders. Know what GAAP is. Understand how accrual basis accounting differs from cash basis accounting and what kinds of transactions would have a financial impact without impacting cash Understand how to compute COGS, gross margin and ending inventory using LIFO, FIFO, and weighted average valuation methods. Be able to determine net income from a series of transactions that include more than just revenue and expense transactions and understand how those transactions impact cash flow Understand the difference between current and long-term assets and liabilities Understand the accounting equation and be able to determine the balance in an account or section of the balance sheet given the balances in other accounts Understand what kinds of costs are included when an asset is purchased. This requires an understanding of shipping terms and how they impact the financial statements as well as payment discount terms Understand how to compute straight line, double declining balance, and units of production depreciation and how a company chooses the appropriate depreciation method. Also understand how these depreciation methods compare to each other – meaning how they compare to one another over the course of an asset’s life. Know how to compute depletion of a natural resource. Understand how an asset’s book value is determined and what kind of transaction would result when that asset is sold Understand how a company computes Goodwill Understand how Unearned Revenue works - when this account is used and how unearned revenue actually translates to earned revenue and how unearned revenue impacts cash flow. Understand how a company estimates and records warranty liabilities and when cash flow is impacted by warranty claims Understand the net realizable value of accounts receivable. Understand how to calculate the net realizable value of accounts receivable, the allowance for doubtful accounts, and bad debts (uncollectible accounts) expense. Relatedly, know the effect of writing off an account on net income and cash flow. Understand what is meant by contingent liabilities and when they must be included in the financial statements Understand how an initial issue of bonds is recorded and how to record bond interest payable at year-end, even if that interest is not paid until a subsequent year Understand how payments on long term notes are divided into principal and interest. Be able to identify the differences in the equity section of the balance sheet for corporations versus partnerships versus sole proprietorships • • • • • • • • • • • • • Be able to explain how a business acquires equity (i.e. what kinds of things are recorded in and impact the equity or capital section of the balance sheet) Understand how common stock, Treasury stock and preferred stock information is presented on the balance sheet in the equity section and how total equity would be computed Understand how to compute authorized, issued, and outstanding shares of stock Understand what happens at dividend date of declaration, date of record, and date of payment. Also understand the financial impacts and financial transactions that would be recorded on each of these dates. Understand how a cash dividend and stock dividend impact cash, retained earnings, and cash flow Understand why a company may or may not elect to pay dividends Be able to distinguish between sole proprietorships, partnerships, and corporations and explain the advantages/disadvantages of each Understand what kinds of business organizations can result in double taxation and what that means Be able to compute the price earnings ratio and earnings per share Be able to explain the objectives of ratio analysis when analyzing or comparing financial information as well as the limitations of this type of analysis Understand how to compute current ratio, debt to assets ratio, debt to equity, return on equity, and return on assets given select financial statement information. Also understand how to differentiate between current and long-term assets and liabilities. Understand what kinds of entries would need to be made in the general ledger as a result of bank reconciliations. Be able to determine the cash flow from operating, investing, and financing activities from given transactions
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