MGAB01H3 Study Guide - Final Guide: Financial Statement, Financial Accounting, Accounting Period

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Published on 15 Dec 2018
School
Course
Professor
University of Toronto
Scarborough Campus
MGAB01
Introductory Financial Accounting I
Fall 2018
Final
Professor: Dr. Hagit Levy-Shalev
Exam Guide
Topic include:
1. Financial Statements and Business Decision
2. Investing and Financing decisions and the Statement of Financial
Position
3. Operating Decisions and Accrual versus Cash basis accounting
4. End of the Accounting Period
5. sales discount, bad debt and internal control
6. Inventory and COGS
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Section1 3 understanding business and accounting, financial statement
1. Three business activity
a) Operating
b) Investing
c) Financing
2. The order for a business
a) Start from financing activity to get money
b) Prepare all factor to product or operating (investing activity)
c) Finally, provide service or good for sell (operating activity)
3. Two types of accounting
a) Financial accounting for external user
b) Managerial accounting for internal user
4. Four accounting statement
a) Statement of financial position (balance sheet)
i. A specific point of time
ii. Follow this formula Assets = liability + Shareholder’s equity
b) Statement of comprehensive income (income statement)
i. For a stable period
ii. Record the revenue and expense
iii. Start at zero
c) Statement of changes in equity
i. Related to the statement of financial position
ii. Record the dividends, profit and so on
d) Statement of cash flows
i. Record cash inflow and outflow
ii. Since for most time, cash and revenue is not at same time, so there is
bias. For example: accrual and deferral
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Exercise question
Question1:
Which one is a financing activity?
a. A company lend money from a bank.
b. A company buy a car to delivery
c. A company sell their product
d. A company pay for the rent fee
Question2: which following statement is correct?
a. An income statement is show the point of a period
b. A balance sheet should become zero at the beginning of a fiscal period
c. A balance sheet shows a specific time’s financial information
d. Most of the cash transaction and revenue are at the same time
Question3:
what is the most important rule of balance sheet?
Answer:
1. a is correct. C, D are operating activities, B is investing activity
2. C is correct. A: income statement shows the whole period situation. B: balance
sheet does not need to become to zero. D, most of them are not at the same time
3. Assets = Liability + Shareholder’s equity
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