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BUS 251 (30)
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Midterm

# Midterm - accounting.docx

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School
Simon Fraser University
Department
Course
BUS 251
Professor
All
Semester
N/A

Description
Midterm /100 12:30-2:20 15 m/c --- similar to sample 2 short answers 3 calculation questions Revenu recognition questions (when to recognize it) Sceanrios Calculations – journal entries, some accounting cycle (not the entire one) – partial, net income, income statements All q’ in class and tutorial – percentage of completion method, bad debts Ratios – simply calculate and when do use it (not asked to calculate exact ratio) ex. How well ? and which one to use. Internal Users External Users Employees Shareholders Management Potential investors Board of Directors Creditors Canada Revenue Agency (Taxation Agency) Accounting Standard Setters There are three characteristics of an asset 1. A resource controlled by an entity 2. The company expects future economic benefits from the use or sale of the resource 3. The event that gave the company control of the resource has already happened  There are three characteristics of a liability 1. An obligation owed by an entity 2. The company needs to settle the obligation with the use of assets or resources 3. The event that gave rise to the obligation has already happened Accounting information should have four qualitative characteristics Understandability Relevance Reliability Comparability Beginning retained earnings + Net income for the period - Dividends declared for the period = Ending retained earnings for accounting cycle  Ending retained earnings = Beginning retained earnings + Net income – Dividends declared RATIOS  Profit margin ratio = Net income / Revenues  Return on assets = Net income / Average total assets  Return on equity = Net income / Average total shareholders’ equity The percentage completed is calculated by =Expenses for this period / Total costs of the project The revenue for the current period is as follows =Percentage completed x Total revenue of the contract Return on investment (ROI) is a ratio that measures the profitability of a company -ROI indicates how much income is generated based on the amount of investment in the company -ROI = Net income / Average investment Acco
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