ACCT 2101 1st Edition Exam 1 Study Guide Lectures 1 6 Lecture 1 January 6 Introduction to the Class Name tent must be placed on desk every day The course binder must be purchased for 20 T square and the course binder has previous exams to be used as practice Post Em is where grades can be viewed Graded items can be picked up in the bins in the Undergraduate Student Commons on the first floor of the Business Building One quiz will be dropped in computing Quiz Average Zero homework assignments will be dropped in computing Homework Average Two class exercises will be dropped in computing Class Exercise Average You will be asked to leave the class for the day if o You talk in class at inappropriate times o If you work on other courses or text while in class o If you put your head on your desk To request a re grade jot a note attach a solution and submit to instructor A 75 or higher must be achieved on the final exam to retain a grade of A no matter what your course average is going into the final exam Laptops are not allowed in class The final exam will take place on Thursday April 30 at 11 30 AM Lecture 2 January 8 A private company is one that does not sell shares of stock ownership to outside parties A public company is one that does sell shares of stock to outside parties through organized stock exchanges The SEC is the Securities and Exchange Commission It is the governing regulating body established in 1934 that monitors the stock market and enforces laws regulating the sale of stocks and bonds A 10 K is an annual report required by the U S Securities and Exchange Commission SEC that gives a comprehensive summary of a company s financial performance A 10 Q is a comprehensive report of a company s performance that must be submitted quarterly by all public companies to the Securities and Exchange Commission The MD A is the Management s Discussion and Analysis that is a required section of financial reports of public companies in which management analyzes the results of operations and cash flows for the periods presented the company also talks about their plans for the future and predicts how they will do o The Safe Harbor Clause is a statement on the MD A that says that the firm won t be penalized for not meeting the expectations The four or five basic financial statements are the Balance Sheet assets liabilities Income Statement combined with Comprehensive Income Statement Statement of Stockholders Equity and Statement of Cash Flows Some alternate names for the Income Statement are the Statement of Earnings Statements of Operations and Statement of Profits and Loss Some alternate names for Net Revenues are Sales Net Sales and Revenues o This number is the first number on the Income Statement Some alternate names for Net Income are Net Earnings and Net Profit o This number is the bottom line of the Income Statement An alternate name for the Balance Sheet is the Statement of Financial Position There are no alternate names for the Statement of Cash Flows Lecture 3 January 13 The Notes to the Financial Statements section offers more information about the documents and helps to expand our understanding of the items The Auditor s Report tells us the audit firm s opinion based on the statements It tells us if the reports represent the company fairly so the reader knows if they should invest in that company The goal of the IASB International Accounting Standards Board is to have worldwide acceptance of a set of international financial reporting standards A proxy statement contains information in voting procedures information on executive compensation and information on the breakdown of audit and nonaudit fees paid to the audit firm Accrual basis of accounting is recognition of revenue in the accounting period when the sale is made rather than when cash is received in order to match expenses with revenue in the appropriate account period Lecture 4 January 15 An account is an element in a system used to classify and summarize measurements of business activity A debit is an entry that is placed on the left side of the T account o Also called charge A credit is an entry that is placed on the right side of the T account Don t think about debits credits as good or bad Double entry means that the debits equal the credits in every entry Assets Liabilities Stockholders Equity Debits Credits Asset Accounts o Debit for increase o Credit for decrease Liability Accounts o Debit for decrease o Credit for increase Paid in Capital o Debit for decrease o Credit for increase Retained Earnings profits of earnings that the company has generated but not distributed to shareholders o Debit for decrease o Credit for increase Expenses o Debit for increase o Credit for decrease Revenues o Debit for decrease o Credit for increase Lecture 5 January 20 Ledger General Ledger is the complete collection of all the accounts of the company Balance Sheet accounts assets liabilities and stockholders equity are called real accounts because they are not subclassifications of other accounts Income Statements revenues expenses are called nominal accounts because they temporarily contain information that will become part of retained earnings Chart of Accounts is the complete listing of account titles and numbers o The accounts are usually systematically numbered Journal is the chronological record of business transactions o A journey entry shows all of the effects of a business transaction expressed in debits and credits o A transaction is recorded in a journal before it is entered in the ledger accounts o All journey entries should be presented following these basic rules All debits on top All credits on bottom and indented This applies to both the account name and the dollar amount of the debit or credit Leave off dollar signs they are unnecessarily Journalizing entering a transaction in a journal Posting recording in the ledger the information contained in the journal Cross indexing placing of 1 account number of the ledger account in the journal and 2 general journal page number in the ledger account Compound journal entry a journal entry with more than one debit and or credit Trial balance the listing of the ledger accounts and their debit or credit balances o This listing verifies that the debits equal the credits Lecture 6 January 22 Some key words when making T Accounts o Buying something on account Accounts payable credit o Performing Accounting services Service revenue credit o Clients agreeing to pay at a later