ACG 2021 Suggested Study Topics for Test 2 – Chapters 3, 4 & 5Chapter 3 – know the following concepts and be able to apply themaccrual-basis accounting – definition p. 108revenue recognition principle – definition & application p. 108+matching principle – definition & application p. 109+accounting cycle, Ill. 3-4 p. 112adjusting entries – purpose p. 112+prepaid expenses p. 113+adjusting entries for prepaid expenses p. 114-117 unearned revenues p. 117+adjusting entries for unearned revenues p. 117-119accrued expenses p. 119+adjusting entries for accrued expenses p. 119-121accrued revenues p. 121+adjusting entries for accrued revenues p. 121-122Ill. 3-8, 3-9adjusted trial balance p. 126, Ill. 3-11Ill. 3-12, Ill. 3-13classified balance sheet, current assets, long-term assets, current liabilities, long-term liabilities p. 129-130, Ill. 3-14temporary accounts, permanent accounts p. 131closing entries – purpose p. 131journalize closing entries p. 132, Ill. 3-15post closing trial balance p. 135, Ill. 3-18Work the Let’s Review: p. 112, 123, 136Chapter 4 – know the following concepts and be able to apply themoccupational fraud p. 166internal controls definition p. 166common examples of preventive controls p. 169-170examples of detective controls p. 170responsibilities for internal controls p. 171limitations of internal control p. 171collusion p. 171cash & cash equivalents p. 172controls over cash receipts p. 173-175controls over cash disbursements p. 175-176bank reconciliation p. 176-180, Ill. 4-9 (know what should be added or deducted to thebank statement balance or the company balance)journal entry to adjust cash balance for bank statement items p. 180-181petty cash p. 182-184, journal entries to establish and replenish*skip the from “Reporting Cash” on p. 184 to the end of the chapterWork the Let’s Review: p. 182Chapter 5 – know the following concepts and be able to apply themaccounts receivable – def. p. 214sales discounts – calculate (now how to interpret if written for example, 2/10, n/30) and make the journal entry for the sales transaction, the collection within the discount period or the collection after the discount period, contra revenue account and income statement presentation, Ill. 5-1 p. 215-217net realizable value – p. 219allowance method p. 220+calculate the estimated amount of bad debts using percentage of receivables p. 221journal entry to record bad debts p. 221journal entry to write off an account receivable p. 223journal entries to collect an account previously written off p. 224estimating uncollectible accounts in the following year p. 226 (very important)bad debt exp. on income stmt. Ill. 5-9allowance for uncollectible accounts on the bal. sheet Ill. 5-10*skip aging of accounts receivable p. 227-230direct write-off method p. 230-231 – only know why we DON’T use this for GAAPnotes receivable – know entries and interest calculations p. 232-236Work the Let’s Review: p. 182, 218, 236Work the Practice assignments in Connect for extra practice on the calculations/problems but also be sure to understand concepts related to the items listed above.Bring a pencil and a calculator to the exam. You cannot use your cell
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