Accounting Final Exam.pptx - ACCOUNTING FINAL EXAM FRIDAY,...

ACCOUNTING FINAL
EXAM
FRIDAY, MAY 11 @ 7:30AM
ENTERPRISE 80
40-50 MULTIPLE CHOICE QUESTIONS
2 WRITING QUESTIONS (CH.10 BONDS & CH.12 STATEMENT OF CASH
FLOWS)

HOW TO PREPARE:
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Multiple choice at the end of the chapter
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Demonstration cases at the end of the chapter
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LEARNSMART
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Supplemental Homework

FINANCIAL ACCOUNTING VS. MANAGERIAL
ACCOUNTING
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Financial Accounting – periodic financial statements and related
disclosures used so external decision makers can evaluate the
company
•
Managerial Accounting – detailed plans and continuous performance
reports so internal decision makers can run the company

CHAPTER 1
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Accounting Equation
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Assets = Liabilities + Stockholders’ Equity
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Interconnections among Financial Statements
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(3) Balance Sheet – statement of financial position that reports dollar amounts for the
assets, liabilities, and stockholders’ equity at a specific point in time
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(1) Income Statement – statement of operations tat reports revenues, expenses, and net
income for a stated period of time
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(2) Statement of Stockholders’ Equity – explains changes in stockholders’ equity accounts
(common stock and retained earnings) that occurred during a specific period of time
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Statement of Cash Flows – reports inflows and outflows of cash for a stated period of time
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Generally Accepted Accounting Principles (GAAP) – the rules that determine the
content and measurement rules of the statements.

CHAPTER 1 TERMS
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Accounting – system that collects and processes financial information about an
organization’s business activities and reports that information to decision
makers.
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Accounting Entity – the organization for which financial data are to be collected.
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Audit – an examination of the financial reports to ensure that they represent
what they claim and conform with GAAP.
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Notes (Footnotes) – provide supplemental information about the financial
condition of a company, without which the financial statements cannot be fully
understood.

CHAPTER 2
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Objective of financial reporting to external users is to provide financial information about the
reporting entity that is useful to existing and potential investors, lenders, and other creditors in
making decisions about providing resources to the entity.
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Useful Financial Information – relevance and faithful representation
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Balance Sheet
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Assets – probable future economic benefits owned or controlled by the entity as a result of past
transactions
•
Liabilities – probable future sacrifices of economic benefits arising from present obligations of a
business as a result of past transactions
•
Stockholders’ Equity – residual interest of owners in the assets of the entity after settling liabilities; the
financing is provided by the owners (contributed capital) and by business operations (earned capital).