due within 4 hours

Study Guide for Acctg 001 Exam 1 (Ch. 1 & 2):

1. Go over the comprehensive problems and multiple choice questions at the end of the chapters.

Try to solve those without looking at provided solutions.

2. Review and repeat assigned problems and in-class activities.

3. The Accounting Equation, and its expanded version.

4. Users of the financial statements.

5. Transactions that should be recorded, and those that should not be recorded.

6. What are the misleading journal entries, misapplication of accounting principles, manipulation

of records and so on…?

7. What is a compound entry?

8. The federal gov’t agency that oversees publicly traded companies (companies listed on the

stock exchanges).

9. Understand concept of separate legal entity, income recognition, matching principle (or

expense recognition), and periodicity.

10. Definition of Assets, Liabilities and Equity.

11. Explain purposes of Income Statement, Retained Earnings Statement, Balance Sheet and Cash

Flows Statement. What is the order of preparing these statements? How they are connected to

each other?

12. Understand accounts, and effect of changes from one account to another. Effect of change in

the accounting equation.

13. What is a balance at of accounting equation at the beginning of the year, during the year and at

the end of the year. Changes in Stockholders’ Equity (Additional Investments by the

shareholders, amount of Net Income or Net Loss, and Dividends paid to the shareholders).

14. What happens Assets, Liabilities and Equity, with certain beginning balances and some

changes…? What would be ending balance(s)? Or what is amount of change from beginning of

the period to the end of the period.

15. Understand and use an account’s normal balance; what does it mean?

16. Accounts with Dr or Cr Normal Balance. What is normal balance of an Asset Account?

Liability Account? Common Stock Account? Retained Earnings Account? Revenue Account?

Expense Account?

17. Know that accountants follow GAAP as the standards.

18. Be able to record business transactions using Debit and Credit sides of an account

19. What are the steps in recording of a transaction.

20. Be able to distinguish between recordable (recognized) and nonrecordable transactions.

21. When do we record (recognize) a revenue and when do we recognize an expense.

22. Understand Trial Balance, what it supposed to represent..

23. Land is the only asset that does not depreciate.

24. What are the accounts represented in Income Statement? Net Income vs Net Loss, what is the

main difference?

25. Be able to evaluate a Balance Sheet. What accounts belong to Assets, Liabilities and

Stockholders’ Equity?