Exam 3 Topic Review Sheet
Managerial vs. Financial Accounting
Types of Business - merchandising,
Product vs. Period Costs in merchandising and
Product costs in a manufacturing business
What is accounting?
What is business? Kinds of businesses?
Keys to a successful business.
Raising capital. Debt vs. Equity financing.
Define financial vs. managerial accounting
and note distinguishing characteristics.
SAMPLE EXAM PROBLEMS AND EXAM PREPARATION
These sample exam problems will serve as excellent review for the actual exams. Solutions can be found at
the end of each of the sample exams. The problems included should give students a good idea of the format
(Lessons 5 - 10)
Use the following information to respond to problems 1 - 6 assuming Zee Corp. maintains
their inventory records on a perpetual basis:
Zee Corp., a wholesaler of unicycles, buys 20 unicy
Topic 6: The Statement of Cash Flows
The statement of cash flows summarizes a companys cash flows for a period of time. It does not include
any transactions or accounts that are not already reflected in the balance sheet or the income statement.
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Topic 5: The Income Statement
5:6 Forecasting the Future
Most forecasting exercises start with a forecast of sales. The sales forecast indicates how fast the
company is expected to grow and represents the general volume of activity expected in the company
Topic 6: The Statement of Cash Flows
6:5: Using Cash Flow Information to Forecast Future Financial Position
Step 3: Analyze the long-term asset accounts:
Note that the PP&E amount is reported net, meaning that accumulated depreciation is subtracted from
Sales increase by 40% over 20X1
PPE (net) increase by $200
- Loans increase by S224
- Dividends are planned to be $6
Property. m and minim. net
Total liabiliies and equiis Derrald Company: Income Statemen
2-2 Balance Sheet
Assets the firms economic resources, formally defined as probable future economic benefits obtained or
controlled by a particular entity as a result of past transactions or events (cash, accounts receivable, inventory,
Total Liabilities/Total Assets
$39,557/$49,736 = 0.795 or 79.5%
Total Current Assets/Total Current Liabiilities
$21,191/$13,549 = 1.56
$2,813/$35,310 = .079 or 8% (
Definition: The amount of assets received on the sale of goods or
services to customers. Those assets typically come in the
form of cash or accounts receivable.
Revenue Recognition Principle: Revenues are to be recognized
Review of Perpetual Inventory Accounting and Costing Methods
Respond to the following:
1. What does it mean to account for inventory perpetually and what
are the benefits of such an approach?
2. What kinds of companies use sp
Topic 1: The Nature and Purpose of Financial Accounting
1:1 What is Accounting and Why Does it Exist?
Bookkeeping is the preservation of a systematic, quantitative record of an activity. The double-entry
bookkeeping system used by businesses today has bee
Beginning AR (from beginning balance sheet)
Plus Sales during the year (from income statement)
Equals Total amount owed to Silmaril by customers
Less Ending AR (from ending balance sheet)
Equals cash collected from customers
Topic 9: Revenue Cycle: Sales, Receivables, and Cash
9:7: Evaluating Credit Policy and Budgeting Cash Receipts
Budgeting Cash Receipts
By knowing when cash deficits and surpluses are likely to occur, management can plan to borrow cash
when needed and repa
Accounting for sales discounts and returns.
Accounting for uncollectible receivables.
Accounting for credit card transactions.
Accounting for intangibles including
Accounting for research and development