Study Guide Midterm I
Study Guide Midterm I ACC 201
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This 3 page Study Guide was uploaded by Petey Martin on Thursday October 8, 2015. The Study Guide belongs to ACC 201 at University of Rochester taught by WOJDAT K in Summer 2015. Since its upload, it has received 81 views. For similar materials see FINANCIAL ACCOUNTING in Accounting at University of Rochester.
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Date Created: 10/08/15
Petey Martin Outline ACC 201 Midterm I Study Guide 0 Chapter 1 Introductory Accounting 0 Chapter 2 Introductory Accounting 0 Chapter 3 Introductory Accounting 0 Chapter 4 Introductory Accounting Review 0 Chapter 1 O 0 00000 OOOOOOOOO Accounting information is needed by numerous decision makers The nancial accounting system has as an end product four primary nancial statements that along with the associated notes serve to provide information to the external decision makers discussed above Balance Sheet Users of the Balance Sheet Income Statement Users of the Income Statement Statement of Stockholders Equity includes the Statement of Retained Earnings Users of Retained Earnings Statement Simple Financial Statement Statement of Cash Flows Users of Cash Flow Statement Management Discussion and Letter to Shareholders Financial Statement Notes Generally Accepted Accounting Principles GAAP Compliance with GAAP Failure to comply with GAAP can lead to misleading nancial statements 0 Chapter 2 O O O O 0 Objective of Financial Accounting Qualitative Characteristics of Financial Reporting Information Principles Followed Exceptions to reduce the volume of information and the cost of providing it Assumptions Accounts are the fundamental building blocks that capture nancial information for later aggregation into the 4 nancial statements Transactions refer to economic events CO 000 0 Journal Entries are the means by which past transactions are recorded in the accounts T accounts are one method of summarizing journal entries Balance Sheet presents a rm s assets liabilities and stockholders equity as of a point in time Chipotle s Example Balance Sheet Chipotle s Example Journal Entries Example for events affecting only the balance sheet Analysis 0 Chapter 3 O O 000000000000 0 The Operating Cycle and the Concept of Net Income The Income Statement captures the results of business operations over a period of time based on accrual accoun ng Elements of Income Statement Income Statement Format Chipotle Example Net Income is not an account Statement of Retained Earnings Statement of Stockholders Equity Analyzing transactions Revenue recognition revenue realization principle Expense recognition expense matching principle Cost principle Chipotle Journal Entries Unadjusted Statements Pro t margin net income net sales 0 Chapter 4 O OO Throughout the accounting period transactions associated with exchanges between the accounting entity and other entities are recorded in the accounts At the end of the accounting cycle a number of steps are performed before the nancial statements are distributed Adjusting previously booked unearned revenue and prepaid expense Purchases of supplies inventory and longlived assets are also deferred expenses previously booked as assets that must be adjusted to re ect expense incurred through the end of the accounting period similar to prepaid expenses Year end adjusting entries to accruals Chipotle s Example Once all adjustments have been made rm prepares an adjusted trial balance to verify that debits equal credits From adjusted trial balance nancial statements are prepared One last element is the closing process 0000 Overall Example Incentives to Misrepresent Revenue and Expense Opportunities to Misrepresent Revenue and Expense Analysis
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