F09+Final+Exam+Prep+Guide

F09+Final+Exam+Prep+Guide - Final Exam Preparation Chapter...

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Final Exam Preparation Chapter Theories Applications (Calculations/Interpretations) 1 Financial Statements Purpose of each statement How to prepare F/S Logic/Flow of F/S preparation 3 Types of Business Decisions: Operating (I/S + WC accounts) Investing (LT Assets) Financing (LT Liab + Equity) 3 types of Business Entities Sole Proprietorship Partnership Corporation Accounting (Balance Sheet) Equation: Assets = Liabilities + Shareholders’ Equity Income Statement: Revenues – Expenses Statement of R.E. = RE b + NI – Dividends Cash Flow Statement: First: Determine if there is a change in Cash due to a transaction If so, then determine Operating (look for items in I/S + WC accounts) Investing (look for items in L-T Assets) Financing (look for items in L-T Liab + Shareholders’ Equity) 2 Qualitative Characteristics of the Accounting Info: Relevance Faithful Representation Comparability Understandability Assets (4 subgroups) Liabilities (2 subgroups) Equity (Share Capital + RE) Revenue Expense Assumptions: Monetary or Unit of Measure Economic Entity Time Period (Periodicity) Going concern GAAPs: Cost Principle
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F09+Final+Exam+Prep+Guide - Final Exam Preparation Chapter...

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