Financial Statement Analysis
Perform a horizontal analysis of comparative financial statements
Perform a vertical analysis of financial statements
Prepare and use common-size financial statements
Use the statement
Final Exam Practice Multiple Choice Questions:
The number of shares currently in the hands of stockholders is the same as the number of shares
(moderate, L.O. 1, d)
The par value of common stock is
Explain the advantages and disadvantages of incorporation
Measure the effect of issuing stock on a companys financial position
Describe how treasury stock transactions affect a company
PROCESSING ACCOUNTING INFORMATION
Use key accounting terms
Analyze business transactions
Understand how double-entry accounting works
Record business transactions
a. Prepare and use a trial balance
b. Analyze transactions f
ACCOUNTING FOR CURRENT
AND LONG-TERM LIABILITIES
Account for current liabilities
Identify and report contingent liabilities
Account for basic bonds-payable transactions
Measure interest expense by using the effective-
Chapter 1: Financial Statements and Business Decisions
o Two groups of decision makers internal and external.
o Financial accounting focused on external decision makers
o Managerial accounting focused on internal decision makers
CHAPIER 1 2 T HE S TATEMEN"TF C ASHF LOWS 2 79
Answer e ach o f l he f ollowing p roblems:
46 Tl1inanciaL tatementsor ZetaCor?orationarepresenred elow.
ZetaC orporation ncomeS tatem nt
For Y earE ndedD ecember cfw_
Cosl o fsales
Chapter 6 Review
1. Understand the difference between Periodic and Perpetual Inventory Recording Systems.
Be able to explain the major advantages/disadvantages and know which accounts are
affected under each recording system
2. Know the different cost sel
Chapter 7 Review Questions
Which of the following expenses is most closely associated with intangible assets?
(moderate, L.O. 6, c)
The cost of land would in
Warranty expense should be recorded in the period:
a. that the product sold is repaired or replaced
b. the product is sold
c. after the product is sold
d. that the product is paid for by the customer
(easy, L.O. 1, b)
Manager: in charge
Dividends: hope to receive a portion of what the company ears and eventually sell their share of
the company at a higher price than they paid
Accounting: a system that colle
Benefits of Stock Ownership
A voice in management. You may vote in the stockholders meeting on major issues concerning
management of the corporation.
Dividends. You receive a proportional share of the distributio
Ingersol Construction Supply Company
Statement of Cash Flows
For the year ended December 31,
Cash flows from operating activities:
Adjustments to reconcile net income/(loss) to net cash
provided by (used in) operating activities
PLANT ASSETS, INTANGIBLE ASSETS,
AND RELATED EXPENSES
Determine the cost of a plant asset
Account for depreciation
Select the best depreciation method for income tax purposes
Analyze the effect of a plant asset dis
Midterm 2 Review: Chapters 6, 7, 8
1. Under which inventory method are shrinkage costs buried in cost of goods sold?
a) Perpetual method
b) Gross profit inventory method
c) Periodic method
d) Last-in, first out method
2. A company has sales of
Prepare adjusting entries dated December 31, 2002, based on the following data.
A two-year insurance policy costing $3,000 was purchased on October 31, 2002.
Salaries owed to employees on December 31, 2002, amount to $2,300.
Types of Businesses:
For Profit & Not For Profit
Our focus will be on the Corporation.
Business Activities of a Corporation - 3 Types:
Financing: Obtain funds (dollars) to start, maintain, and grow the business.
Investing: Invest funds in produc