Acct 1080 Comprehensive Exam Study Guide.docx - Online Acct...

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Online Acct 1080 -- Comprehensive Exam Study Guide Chapter 1 1. Explain why accounting is important and list the users of accounting information a. Know the differences between financial and managerial accounting b. Understand the various users who interpret financial information 2. Describe the organizations and rules that govern accounting a. Know terminology introduced here such as FASB and GAAP b. Understand basic accounting principles/concepts such as: i. Economic Entity Assumption ii. Cost Principle iii. Going Concern Assumption iv. Monetary Unit Assumption 3. Describe the accounting equation and define assets, liabilities, and equity a. Know the accounting equation and the various terms introduced 4. Use the accounting equation to analyze transactions a. Be able to analyze transactions introduced in the homework and how these various transactions will increase or decrease the accounting equation b. Understand the basic financial statements i. Income Statement ii. Statement of Owner’s Equity iii. Balance Sheet Chapter 2 1. Explain accounts as they relate to the accounting equation and describe common accountsa.Be able to describe/define the various accounts used in the accounting equation: i. Assets ii. Liabilities iii. Owners Capital & Withdrawals iv. Revenues v. Expenses b. Understand the basic terminology introduced in chapter 2: i. Account ii. Ledger iii. T Account iv. Chart of Accounts
2. Define debits, credits, and normal account balances using double-entry accounting and T- accounts a. Understand how transactions will increase or decrease a T account b. Be able to define “normal account balance” c. Be able to define the types of accounts that increase with a debit and decrease with a credit d. Be able to define the types of accounts that increase with a credit and decrease with a debit e. Record transactions in a journal and post journal entries to the ledger i. Understand the importance of Source Documents ii. Understand the flow of accounting data f. Understand transactional analysis as defined in the homework from Chapter #2 3. Understand the many uses of the trial balance and how this is used to prepare financial statements a. Be able to understand how information flows from the trial balance to the financial statements 4. Understand the debt ratio and how it’s used to evaluate business performance a. Understand how to calculate and interpret the debt ratio Chapter 3 1. Differentiate between cash basis accounting and accrual basis accounting a. Understand how recording revenue differentiates between the two b. Understand how recording expenses differentiates between the two 2. Define and apply the time period concept, revenue recognition, and matching principles a. Understand basic accounting principles/concepts such as: i. The Time Period Concept ii. The Revenue Recognition Principle iii. The Matching Principle 3. Explain the purpose of and journalize and post adjusting entries a.

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