Midreview

Midreview - Midterm Review Chapter 1-7 Click to edit Master...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Slide 1 Click to edit Master subtitle style Midterm Review: Chapter 1-7
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Slide 2 Key Learning Points of Chapter 1 1. Understand the purpose, information contents, structure, key elements of the four basic financial statements 2. Understand the balance sheet equation, income statement equation, retained earnings equation and cash flow equation 3. The relation among the four financial statements 4. Be able to prepare four financial statements given necessary transaction information.
Background image of page 2
Slide 3 The four basic financial statements and the four equations The Balance sheet reports the financial position of an entity at a particular point in time. Assets=Liabilities + Stockholders’ equity The income statement reports the measure of performance of a business, revenues less expenses during a period of time. Revenue-Expenses=Net income Statement of Retained Earnings reports how net income and the distribution of dividends affected the financial position of the company during the accounting period. Beg. RE + NI – Dividends = End. RE The Statement of Cash Flows reports inflows and outflows of cash during the accounting period in the categories of operating, investing and financing. Change in Cash=CFO+CFI+CFF
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Slide 4 44 Relation Among the Statements l Cash + Other assets = Liab + (Cont. Capital + Retained Earnings) ó ΔCash + ΔOther Assets = ΔLiab + (ΔCont.Capital + ΔRE) I/S: Revenue – Expense = Net Income SRE: Beg. RE + NI – Dividends = End. RE l ΔRE = NI – Dividends SCF: CFO + CFI + CFF = ΔCash X m e a n s Δ (Xt – Xt-1 ) B/S: Assets = Liabilities + Stockholders’ Equity
Background image of page 4
Slide 5 Key Learning Points of Chapter 2 1. Familiar with typical account titles on the balance sheets and income statements 1. Analyze Transactions, in particular investing and financing transactions. 1. Debit-Credit Framework, Journal entries and T- accounts. 1. Cash flow statements: investing and financing activities
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Slide 6 Typical Account Titles Assets Cash Short-Term Investment Accounts Receivable Notes Receivable Inventory (to be sold) Supplies Prepaid Expenses Long-Term Investments Equipment Buildings Land Intangibles Liabilities Accounts Payable Accrued Expenses Notes Payable Taxes Payable Unearned Revenue Bonds Payable Stockholders’ Equity Contributed Capital Retained Earnings The Balance Sheet
Background image of page 6
Slide 7 Typical Account Titles Revenues Sales Revenue Fee Revenue Interest Revenue Rent Revenue Expenses Cost of Goods Sold Wages Expense Rent Expense Interest Expense Depreciation Expense Advertising Expense Insurance Expense Repair Expense Income Tax Expense The Income Statement
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Slide 8 Analyzing Transactions Step 1: Accounts and effects Identify the accounts affected Classify them by type of account (A, L, SE). Determine the direction of the effect (increase or decrease) on each account.
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 58

Midreview - Midterm Review Chapter 1-7 Click to edit Master...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online