Accounting 301 Midterm

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1. (TCO 1) Name three users of accounting information. Why is accounting information critical for the users that you listed? (Points : 12)

Question 2. 2. (TCO 2) Suppose your company sold $25,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? (Points : 12)

Question 3. 3. (TCO 3) Pressure is one of the components of the fraud triangle. What types of pressures do people face that could lead to fraud? Give an example of how pressure could lead to fraud. (Points : 12)

Question 4. 4. (TCO 4) How does vertical analysis of financial statements differ from horizontal analysis? Which method do you think is a better analysis tool? (Points : 12)

1. (TCO 3) Separation of duties is a key feature in an internal control system. Why is separation of duties such an important internal control? Give an example of separation of duties as an internal control. (Points : 24)

Question 2. 2. (TCO 1) Describe the income statement. Why is this statement important to the company, creditors, and investors? (Points : 24)

Question 3. 3. (TCO 4) Name and describe one solvency ratio. What does this ratio measure? What is the formula for this ratio? (Points : 24)