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Midterm

ACC 100 Study Guide - Midterm Guide: Quick Ratio, Time Series, Scantron Corporation


Department
Accounting
Course Code
ACC 100
Professor
Else Grech
Study Guide
Midterm

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ACC 100 - BUSINESS CYCLE ACCOUNTING
MIDTERM GUIDANCE
CONCEPTS TO KNOW:
Understand the basic four financial statements, what they report, how they are
useful and how they are inter-connected.
Understand the debit-credit framework and know how to make basic journal
entries.
Know how to make adjusting entries for accruals and deferrals and why they are
important.
Know the difference between cash and accrual accounting and what GAAP
requires.
Understand the purpose of and methods for making closing entries and be able to
distinguish these from adjusting entries (i.e. what different purposes do closing
entries and adjusting entries serve?).
Be able to name and describe each stage of the Accounting Cycle and know the
order in which they occur and how they are inter-related.
Know the general kinds of financial ratios (Profitability, Liquidity, Solvency),
what they are used for and who uses them.
Be sure to understand the formulas for all financial ratios and where to find the
inputs (i.e. which statements or other sources).
Know how to compare the ratios of two or more different companies and
determine which company is performing better with respect to the particular ratio.
Be able to explain the fundamental conceptual differences between ratios that are
closely related (i.e. current vs. quick ratio or return on assets vs. return on equity).
Understand why ratio analysis is used in lieu of just analyzing one financial
metric by itself.
Understand time series, vertical and horizontal analysis as well as indexes.
Understand how accounting information gets used on Wall Street and among the
investing public.
Understand the basic principles of Internal Control and how to do a simple bank
reconciliation.
TEST FORMAT:
First Part: Multiple Choice / Short Answer Questions
Second Part: Longer calculation, analysis and conceptual questions
Test is closed book, closed notes.
A formula sheet will be provided for ratios
Please bring a scantron and pencil for the multiple choice and a calculator.
Test will be 2 hours in length (we will discuss Budgeting afterwards)
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