Study Guides (258,859)
CA (125,024)
Ryerson (8,699)
Accounting (370)
ACC 100 (188)
Midterm

Midterm Study Guide

10 Pages
240 Views

Department
Accounting
Course Code
ACC 100
Professor
Walter Krystia

This preview shows pages 1-3. Sign up to view the full 10 pages of the document.
Pa g e | 1
Financial Accounting Mid-Term
Review
Chapter 1
Learning Objectives
1.Distinguish among the forms of organizations (p. 6)
a.Corporations An entity organized under the laws of a government.
Ownership is evidenced by shares.
b.Proprietorships Business with a single owner.
c.Partnerships Business owned by two or more individuals and with the
characteristic of unlimited liability.
d.Non-business Organization operating for another purpose other than profit.
2.Describe the various types of business activities (p. 8)
a.Financing Sources of cash
i.Capital stock Owners contributions to a corporation.
b. Investing Uses of cash to procure future benefits (assets)
c.Operating Cash flows from operating activities
3. Identify the users of accounting information and their needs (p. 11)
a.The primary users of financial statements are those who depend upon the
economic information conveyed in those statements to make decisions.
Primary users may be broadly classified as internal users and those external
to the company.
i. Internal users are usually managers of companies.
ii.External users include shareholders, investors, creditors, and
government agencies.
www.notesolution.com
Pa g e | 2
b.Financial accounting is the branch of accounting used to communicate with
outsiders through financial statements.
i.Shareholders and potential shareholders
ii.Bondholders, bankers, and other creditors
iii.Government agencies
iv.Other external users such as other companies that wish to sell their
product.
4.Explain the purpose of each of the financial statements and relationships among
them. (p. 13)
a.The three major financial statements
i.The balance sheet is a snapshot of a company’s financial position at
the end of the period. It reflects the assets, liabilities, and
shareholders equity.
1.Retained earnings the part of owners equity that represents
income less dividends paid over the life of an entity.
ii.The income statement summarizes the financial activity for a period
of time. Items of revenue, expense, gains, and losses are reflected in
the income statement.
1.Summarizes revenues and expenses.
iii.Ultimately, all net income (loss) and dividends are reflected in
retained earnings on the balance sheet. The statement of retained
earnings links the income statement to the balance sheet by showing
how net income (loss) and dividends affect the retained earnings
account.
1.Links balance sheet and income statement by showing the how
net income becomes retained earnings after dividends have all
been paid.
2.Dividends are not an expense, and so they do not appear on the
income statement. Instead they are a distribution of the income
of the business to the shareholders.
www.notesolution.com
Pa g e | 3
5. Identify and explain the primary assumptions made in preparing financial
statements. (p. 19)
a.The usefulness of accounting information is enhanced through the various
assumptions set forth in the conceptual framework for the methods, rules,
and practices that comprise generally accepted accounting principles (GAAP).
b. Important assumptions in the conceptual framework are:
i.Economic entity concept The assumption that a single, identifiable,
unit must be accounted for in all situations.
ii.Cost principle Assets are recorded at the cost to acquire them.
iii.Going concern The assumption that an entity is not in the process of
liquidation and it will continue indefinitely.
iv.Monetary unit The yardstick used to measure amounts in financial
statements, the dollar.
v.Time period Artificial segment on the calendar, used as the basis for
preparing financial statements.
6.Describe the various roles of accountants in organizations (p.21)
a.Accountants play an important role in the measurement, analysis, and
communication of financial information and are employed by business, non-
business, and governmental entities.
b.Public accounting also employs many accountants that provide auditing, tax,
and management consulting services.
Chapter 2
Financial Statements
oBalance sheet
Shows obligations due in near future, and what assets can satisfy
them.
oIncome statement
Shows revenues and expenses for a period of time.
www.notesolution.com

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
P a g e 1 Financial Accounting Mid-Term Review Chapter 1 Learning Objectives 1. Distinguish among the forms of organizations (p. 6) a. Corporations An entity organized under the laws of a government. Ownership is evidenced by shares. b. Proprietorships Business with a single owner. c. Partnerships Business owned by two or more individuals and with the characteristic of unlimited liability. d. Non-business Organization operating for another purpose other than profit. 2. Describe the various types of business activities (p. 8) a. Financing Sources of cash i. Capital stock Owners contributions to a corporation. b. Investing Uses of cash to procure future benefits (assets) c. Operating Cash flows from operating activities 3. Identify the users of accounting information and their needs (p. 11) a. The primary users of financial statements are those who depend upon the economic information conveyed in those statements to make decisions. Primary users may be broadly classified as internal users and those external to the company. i. Internal users are usually managers of companies. ii. External users include shareholders, investors, creditors, and government agencies. www.notesolution.com
More Less
Unlock Document


Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit