ac101_rev07-09 - Revised July 2008 EXAM REVIEW ACCOUNTING...

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Revised July 2008 Page 1 of 12 EXAM REVIEW ACCOUNTING 101 - UNIT III - CHAPTERS 7, 8 & 9 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 7 – Accounting for Receivables Explain the difference between the direct write-off method and the allowance method. Journalize the entries for the allowance method of accounting for uncollectible accounts. Estimate uncollectible accounts expense based on sales and based on an analysis (aging) of receivables. Journalize the entries for the direct write off of uncollectible receivables. Journalize the entries for the write off of uncollectible receivables using the allowance method. Journalize the entries for notes receivable transactions. Journalize the entries to write off of dishonored notes receivable. Journalize accrued interest revenue prior to maturity date. Calculate interest revenue at the maturity date and at an interim date, the term of the note and the maturity date of the note. Know the different methods of selling receivables. Compute days’ sales outstanding (uncollected) and accounts receivable turnover. Chapter 8 - Accounting for Long-Term Assets Know how to determine the cost of long-term assets. Know how to classify fixed asset costs as either capital expenditures or revenue expenditures (operating expenses).
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Revised September 2007 Page 2 of 12 Compute depreciation expense the using straight-line, the units-of-production, and the declining-balance methods. Adjust depreciation expense calculations when the asset is owned for less than a full year (partial year depreciation). Compute and journalize adjustments to depreciation for changes in estimates, such as salvage value or useful life. Compute depletion expense and journalize the entry for depletion of natural resources. Journalize entries for acquiring and amortizing intangible assets, such as patents and copyrights. Journalize entries for the disposal of fixed assets: Discarding assets Selling assets Exchanging assets for similar assets Compute total asset turnover. Chapter 9 – Accounting for Current Liabilities Liabilities are probable future payments for which there are current obligations to pay due to the occurrence of past events.
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