REVIEW FOR EXAM 1 SPRING 2020
The following are the topics for exam one IN ORDER. You can probably find the exact problems from
Chapters 1-4, Topics A, B, and C. The test is multiple choice and you can bring ONE 3” x 5” card with
notes on both sides. (may be typed, handwritten, etc.)
1. Assets = Liabilities + Owners’ Equity (Balance Sheet)
2. Statement of Cash Flows:
Operating, Financing, Investing
3. FASB is private, makes accounting rules for U.S., 7 year term, financed by public companies
4. SEC has legal authority,
puts people in jail, has authority to make accounting rules (legal authority but lets FASB do it)
5. Definition of accounting (four terms)
6. Income Statement:
7. Revenues – Expenses = Net Income
8. Statement of Cash Flows:
Operating, Financing, Investing
9. IASB is private,
makes accounting rules for international accounting rules
10. How can Reliable financial information can help users
They can make a more informed forecast for future
11. Economic resources that are owned or controlled by a company” – Which ONE of the terms
below matches the definition/description just given?
Assets
12. Know how to work with equation:
Assets = Liabilities + Owners’ Equity using numbers
13. Know how to pick out Current Assets, Total Assets, Current Liabilities, Total Liabilities
Current Assets: Accounts receivable, Inventory, Cash, anything pre-paid, short term
investments,
Current Liabilities: Accounts payable, Unearned rent,
14. Know entity concept, going concern concept
It is assumed a company will exist in the future: going concern concept.
15. Definition of assets, liabilities, equity, revenue, expenses, gains, losses
Economic resources that are owned or controlled by a company” – Which ONE of the terms
below matches the definition/description just given? = assets
16. Know how to determine net income and figure out Earnings per Share
How to calculate net income: sales-COGS- expenses= net income
Earnings per share= net income / amount of shares.
17. Why does the SEC require all publicly traded companies to provide AUDITED financial
statements?
To spend less time wondering if the statements are truth full
18. Definition of assets, liabilities, equity, revenue, expenses, gains, losses
19. Amount of assets created through doing business operations” – Which ONE of the terms
below matches the definition/description just given= Revenues
20. Know how to work with equation: Assets = Liabilities + Owners’ Equity using numbers
21. Know how to pick out Current Assets, Total Assets, Current Liabilities, Total Liabilities
22. Definition of assets, liabilities, equity, revenue, expenses, gains, losses
