Accounting 301 Final

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1. (TCO 1) What is the accounting equation? Suppose your company sold $25,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? (Points : 17)

Question 2. 2. (TCO 2) What are the four basic financial statements? Describe the balance sheet, and explain why it is important. (Points : 17)

Question 3. 3. (TCO 3) What is the Sarbanes-Oxley Act? Do you think this act has more importance for the accounting profession or for investors? Why? (Points : 17)

Question 4. 4. (TCO 4) What is horizontal analysis of financial statements? Which analysis do you think is better—horizontal or vertical? (Points : 17)

1. (TCO 8) Why is capital budgeting important? What is the IRR method? How is it calculated? (Points : 26)

Question 2. 2. (TCO 9) What are five different types of decisions that could use incremental analysis? What are the relevant costs in accepting an order at a special price? (Points : 26)

Question 3. 3. (TCO 10) How is a transfer price determined? What are the two methods to determine transfer price? Which do you think is better? (Points : 26)

Question 4. 4. (TCO 11) What is direct labor? Give an example of direct labor. How does direct labor differ from indirect labor? Give an example of an indirect labor. (Points : 26)

1. (TCO 5) What is the formula for margin of safety? What does this formula tell a company? Why is this important to know? (Points : 26)

Question 2. 2. (TCO 6) What is the financial budget? Describe the two things that need to be prepared for the financial budget. (Points : 26)

Question 3. 3. (TCO 7) What are investment centers responsible for? How does an investment center differ from a profit center? How does it differ from a cost center? (Points : 26)