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ACCT 2000- Midterm Exam Guide - Comprehensive Notes for the exam ( 30 pages long!)


Department
Accounting
Course Code
ACCT 2000
Professor
E.Briggs
Study Guide
Midterm

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LSU
ACCT 2000
MIDTERM EXAM
STUDY GUIDE

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Accounting 2000
Chapter 1 Class Notes
Page 1 of 9
1. Identify the forms of business organization and the uses of accounting information.
2. Explain the three principal types of business activity.
3. Describe the four financial statements and how they are prepared.
Forms of business organization:
Name/Definition
Advantages
Disadvantages
1.
Simple to establish
Control
Tax Advantages
Personal liability
2.
Simple to establish
Broader skills and
resources
Tax advantages
Personal liability
3.
Easy to transfer ownership
Easy to raise capital
No personal liability
Taxes
The purpose of financial information is to provide inputs for decision making.
Accounting is the ____________________ that _____________, ____________, and
________________ the economic events of an organization to interested users.
Users of accounting information
Type
Examples
How use financial information
1.
Managers,
Supervisors,
Company Officials
Internal reports plan, organize
and run a business
2.
Investors, Creditors,
Regulators
Decisions to buy or sell stock or
loan company money
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Accounting 2000
Chapter 1 Class Notes
Page 2 of 9
Ethics in Financial Reporting
Effective financial reporting depends on sound __________________________.
Financial scandals led Congress to the pass the Sarbanes- Oxley Act in 2002.
Key Provisions:
1. Top management must certify accuracy of financial reports
2. Severe penalties for fraud
3. Increased auditor duties
Three types of business activities and examples of each.
Business Activity
Examples
*Borrow money from
creditor
*Issue (sell) shares of stock
to investors
Resources owned and used
by a business (computers,
equipment, delivery trucks)
Shoe store selling shoes,
dentist cleaning teeth, lawn
care company mowing
lawns.
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