Exam 1 Review Sheet

The chapter coverage of the exam is as follows:
 Chapter 1: 33%
 Chapter 2: 67%
100%
Demos and Reviews in mybusinesscourse (for all learning objectives) are also good resources
1) Chapter 1—Accounting Environment and the Conceptual Framework
a) Describe the objective of general-purpose financial reporting
i) Reporting objective
ii) General-purpose reporting
iii) Decision makers
iv) Resource allocation
b) Identify key organizations that determine GAAP and the factors that drive high-quality reporting
i) SEC
ii) AICPA
iii) FASB
iv) EITF
v) IASB
vi) Auditors
vii) Ethics
c) Describe the qualitative characteristics, of and the constraint on, useful financial information
i) Fundamental characteristics
ii) Enhancing characteristics
iii) Cost constraint
d) Explain financial statement elements in the FASB Conceptual Framework
i) Point in time elements
ii) Period of time elements
e) Describe the four key accounting assumptions
i) Economic entity
ii) Going concern
iii) Monetary unit
iv) Periodicity
f) Describe the four key accounting principles
i) Measurement
ii) Revenue recognition
iii) Expense recognition
iv) Full disclosure
g) Be sure to know “the triangle”, Exhibit 1-10, which summarizes much of Chapter 1
2) Chapter 2: Accounting Information System
a) Analyze the effects of economic transaction using the accounting equation
i) Economic Transactions
ii) Accounts
iii) Assets
iv) Liabilities
v) Stockholders’ Equity
vi) Double-entry system
b) Identify, record, and post tranactions
i) Chart of accounts
ii) Normal balances
iii) Accounting cycle
iv) Identify
v) Record
vi) Post
c) Prepare an unadjusted trial balance
i) Account balances
ii) Debit balances
iii) Credit balances
iv) Debit/Credit equality
d) Identify, record, and post adjusting journal entries
i) Deferral of expense
ii) Deferral of revenue
iii) Accrual of expense
iv) Accrual of revenue
e) Prepare an adjusted trial balance
i) Adjusting entries
ii) Account balances
iii) Debit balances
iv) Credit balance
v) Debit/Credit equality
f) Prepare financial statements from an adjusted trial balance
i) Income statement
ii) Statement of stockholders’ equity
iii) Balance sheet
g) Prepare and post closing entries and prepare a post-closing trial balance
i) Closing entries
ii) Income summary
iii) Dividends
iv) Retained earnings
v) Post-closing balance sheet