Exam 1 Review

o o o o 30 questions total 18 conceptual 12 math 60% conceptual

Chapters 1 4

Chapter 1
1. 2. 3. 4. 5. 6. Understand the demand for financial statements. (Slide 10) Know the costs and benefits of disclosure. (Slide 11) Know the major components of the conceptual framework. (Slide 15) Understand the concept of conservatism. (Slide 15; HW) Understand the nature of financial reporting. (Slide 20) Understand the difference between GAAP and pro forma earnings. (Slide 21)

Chapter 2
7. 8. 9. 10. 11. 12. 13. 14. Know and understand the revenue recognition rule. (Slide 5) Know how to adjust cash basis to accrual basis revenues, or vice versa. (Slide 6) Know how to adjust cash basis to accrual basis expenses, or vice versa. (HW) Understand matching expenses with revenues. (Slides 23-25) Know the types of transitory earnings as well as examples of each type. (Slides 27-30) Know the disclosure requirements for transitory earnings. (Slides 27-30) Know the different types and treatment of accounting changes. (Slide 35) Understand other comprehensive income. (Slides 38-42)

Chapter 3
15. Be able to apply the percentage of completion method. (Slides 5-8) 16. Understand conceptually the completed contract method. (Slide 10) 17. Understand revenue recognition for commodities under the completed-transaction method. (Slides 11-16) 18. Understand revenue recognition for commodities under the market-price method. (Slides 1116) 19. Be able to apply the installment sales method. (Slides 17-20) 20. Understand the specialized transactions. (Slides 22-25) 21. Know the revenue recognition abuses examples. (Slides 29-31) 22. Know which methods IFRS allows regarding installment sales. (Slide 39) 23. Understand basic journal entries covered in class.

Chapter 4
24. Know how balance sheet items are measured. (Slides 6-11) 25. Know how to determine cash inflows/outflows based on balance sheet changes and income statement amounts. 26. See #24 27. See #24 28. See #24 29. Understand the components of the cash flow statement. (Slide 16) 30. Know examples of cash transactions and under which section in the cash flow statement they belong. (Slides 17 and 18)