Financial Accounting Final Exam Topics Know the terminology for shares authorized issued unissued outstanding treasury and be able to calculate them Know how to record the issuance of stock with a par value Common stock additional paid in capital Know the difference between paid in capital and additional paid in capital and know how to calculate both Know how treasury stock is recorded and how it affects stockholders equity and the other accounts Know the difference between a cash dividend stock dividend and a stock split Be able to determine the effects on retained earnings from stock transactions and other business activities Know the stockholders equity section on the balance sheet with the inclusion of paid in capital and treasury stock Be able to find any missing amount Identify the following for accounts Type of Account Asset Expense Liability Revenue Stockholders Equity Contra Accounts FOR ANY ACCOUNT Adjusting entries Closing Status Closed Not closed Financial Statement s On which reported Income statement Statement of Stockholders Equity Balance Sheet Statement of Cash flow Identify adjustments and which accounts are adjusted such as EXAMPLE At the end of its accounting period December 31 2014 BIG Corporation owed 1 000 for property taxes which had not been recorded or paid Therefore the 2014 adjustment should be 1 000 increase to a liability account and 1 000 increase to an expense account Note Each adjustment affects one balance sheet account and one income statement account The purpose of an adjustment is to make sure all expenses revenues assets and liabilities have been recognized prior to preparing the financial statements Failure to record an adjustment will cause both the income statement and the balance sheet to be improperly stated If BIG Corporation had failed to record the 1 000 adjustment at the end of 2014 liabilities would have been understated stockholders equity would have been overstated expenses would have been understated and net income would have been overstated Know the order the financial statements are prepared Know why we do CLOSING entries Know how to classify assets and liabilities on a classified balance sheet current versus non current Know the revenue recognition principle EARNED and how to apply it Know the matching principle expense recognition and how to apply it Cash flow items classification Operating Investing or Financing Be able to find any missing amount on the balance sheet Be able to find any missing amount on the income statement Know and be able to use the cost of goods sold equation Know how to calculate the current ratio CA CL Know how to calculate gross profit ratio AND profit margin net profit margin Know how to do straight line deprecation to find depreciation expense accumulated depreciation and book value and the purpose of depreciating an asset Know WHY we depreciate fixed assets Be able to calculate interest expense or interest revenue P x R x T Know the statement of stockholders equity and be able to find missing amounts Know the statement of retained earnings and be able to determine any missing amounts Financial Statements Know the order the financial statements are prepared their equations both simple and more complex and be able to solve for any unknown OR without XR Income Statement without gains losses other income or other expenses Sales SR A and other XR Net sales COGS GP operating expenses operating income or IBT income tax expense NI Net sales COGS GP operating expenses operating income or IBT income tax expense NI Sales COGS GP operating expenses operating income OR without contra revenue and taxes Cost of Goods Sold BI P GAFS EI COGS Statement of Retained Earnings BRE NI Dividends ERE Balance Sheet Accounting Equation A L SE Statement of Stockholders Equity Balance Sheet Assets Liabilities Stockholders Equity Current Assets Non current Assets Current Liabilities Non current liabilities Total Liabilities Common Stock Additional paid in capital Paid In Capital Retained Earnings Treasury Stock Total Assets Total Stockholders Equity Total Liabilities SE
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