ac101_rev01-03 - Revised July 2008 EXAM REVIEW ACCOUNTING...

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Revised July 2008 Page 1 of 16 EXAM REVIEW ACCOUNTING 101 - UNIT 1 - CHAPTERS 1, 2 & 3 STUDY SUGGESTIONS Review your class notes, homework exercises and problems. Be sure to review any chapter appendicies assigned on the General Course Outline. Review Demonstration Problem, Summary and Key Terms at the end of each chapter. Answer the Multiple Choice Quiz at the end of each chapter. Answer Multiple Choice Quiz A and B on the textbook website www.mhhe.com/wild . Know accounting terms and concepts by answering the Discussion Questions at the end of each chapter. Know the account classification (i.e. asset, liability, or owner's equity) and normal balance of all accounts. Know the what the financial ratios mean and how to calculate them. Other online help is available ay a variety of sites such as: http://www.cliffsnotes.com/WileyCDA/Section/id-305261.html http://www.simplestudies.com/ Chapter 1 – Accounting in Business Understand the accounting equation and its three basic elements. Know how business transactions affect the three basic elements in the accounting equation . Know which accounts are income statement accounts, how to prepare an income statement and how to calculate net income without preparing an income statement. Know how to prepare a retained earnings statement . Understand which accounts are balance sheet accounts and be able to prepare a balance sheet. Chapter 2 – Accounting for Transactions Know what a journal is and what it is used for. Know what a ledger is and what it is used for. Know what a chart of accounts is and what it is used for. Know the rules of Debit and Credit and the normal balances of accounts: Debit is the left side of an account and Credit is the right side of an account
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Revised July 2008 Page 2 of 16 Normal Balance Normal Balance Increase Decrease Increase Decrease Balance Sheet Accounts Income Statement Accounts Asset Debit Credit Revenue Credit Debit Liability Credit Debit Expense Debit Credit Owner's Equity Capital Stock Credit Debit Retained Earnings Credit Debit Dividends Debit Credit Know how to journalize transactions , including which accounts to debit and credit, for the various types of transactions. Know how to prepare a trial balance and correct any errors. Chapter 3 – Preparing Financial Statements Understand the matching concept and how it relates to accrual accounting. Know how to classify items as: deferred expenses (prepaid expenses) deferred revenues (unearned revenues) accrued expenses (accrued liabilities) accrued revenues (accrued assets) Know how to journalize adjusting entries and understand their characteristics. Know what the effects on the financial statements will be if adjusting entries are omitted.
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ac101_rev01-03 - Revised July 2008 EXAM REVIEW ACCOUNTING...

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