Financial Accounting Midterm Exam Study Guide
Sias International University: Fall 2012
Mr. Ashton Converse
www.accountingsias.weebly.com
Directions for Exam:
Take your time and read each question carefully. Please use only your thoughts and not
your classmates thoughts, refrain from looking at others’ exams, do not cheat, no using
notes, cellphones are not allowed, and answer all questions. Take a deep breath, choose
only one answer, and try your best. Choose the best answers.
What to Review
 PowerPoint Slides
 Notes from Class
 Mid-Chapter Summary Problems
 Review PPT Slides
 Textbook and Practice Problems
 Homework
 Accounting Coach
 The Website
Exam Layout
 Multiple Choice: 20 Questions
 Fill in the Blank: 5 Questions
 Short Response: 5 Questions
 Essay: 1 Question
 Transaction/Journal: 1 Question
 Financial Statement: 1 Question
Topics on Exam
Chapter 1: Financial Statements and Introduction
 Know Financial Accounting
 The Financial Statements
 Shareholders
 Partnership
 Stock
 PPE
 All types of assets
 Proprietorship
 Forms of Business
 Revenue and Net Income
 Liabilities, Assets, Balance Sheet, Owners’ Equity
 Difference between Financial Accounting and Managerial Accounting
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Affects of Turmoil in a Country
Key to Accounting
Entity and GAAP
The Principles and Concepts of Chapter 1
Inflation, Deflation, and the Accounting Equation
Managerial Decision Guidelines
Chapter 2:
 The different assets
 Inventory
 Accounts Payable and Receivable
 Notes Payable and Receivable
 Long-term Debt
 Stockholders’ Equity
 Common Stock
 Retained Earnings, Dividends
 5 Necessities for Every Financial Statement Report
 Parts to an account
 Transaction, account, cash, prepaid expenses
 Assets and Liabilities and Stockholders’ Equity
 Single-Entry vs. Double-Entry Accounting
 Debit vs. Credit
 Transaction Accounts
 Expansion of the Accounting Equation
 T-accounts, journal, ledger, posting, trial balance
 Flow of Accounting
 Your Holiday Project (interview)
Chapter 3:
 www.accountingcoach.com
 Why companies spend millions of dollars on research?
 Why accounting is important?
 How to keep employees motivated
 Accrual vs. Cash-basis accounting
 Accrual Accounting Cash Flows
 Time Period Concept
 Matching Principle
 Revenue Principle
 Accounting Period
 Fiscal year
 Deferral, Depreciation, Accrual
 Accumulated Depreciation
 Book Value
 Accrued Revenue, Accrued Expense, Unearned Revenue
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Closing the Book and Entries
Liquidity, Operating Cycle, Report Format, and Account format
Single-step Income Statement, and Mult-step
Current Ratio and Debt Ratio
Chapter 4:
 What happens if a company fails to supervise its employees some
 Internal Control
 Sarbanes-Oxley Act
 Components of Designing Internal Control
 Controller and Audit
 All documents and records must be kept safe
 Firewall and Encryption
 Check, Bank Statement, Electronic Fund Transfer
 Bank Reconciliation
 Items for Reconciliation
 Controlling/Managing Cash: Physical Receipts and Mail Recipts
 Check and Review
 Petty Cash and Budget
 Ethics and Accounting
 Being Ethical
 Managerial Decision Guidelines
Chapter 5:
 Creditor vs. Debtor
 Debt Instrument
 Equity Security
 Maturity and Term
 Short-Term Investments
 Trading Investments
 Transactions
 Journal and Ledger Entries
 Gain vs. unrealized gain
 Impact on Balance Sheet and Income Statement
 Financial Statements
 Receivables
 Security/collateral
 Uncollectable Receivables
 Principal and Interest