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ACCT504 Midterm Exam Study Guide

The ACCT504 Midterm will be an online open-book, open-notes, open-computer exam with a time limit of 2 hours and 30 minutes. It will be worth 150 points or 15% of the course grade. The Midterm is multiple pages and consists of 30 multiple choice questions, one essay question, and one problem. The multiple choice questions are worth 3 points each. Some of the multiple choice questions are problem-based. There is also one essay question worth 25 points and one problem worth 35 points. Terminal Course Objectives A, B, C, D, and E are all addressed on this exam. For the multiple choice questions worth 90 points, you should 1. know what information is desired by external users of financial statements; 2. know about operating activities, investing activities, and financing activities; 3. be able to calculate net cash provided by operating activities in a simple situation (by identifying which activities are operating activities); 4. know the definitions of asset, liability, equity, revenue, and expense; 5. know what items appear under each classification in the balance sheet; 6. know how to compute earnings per share; 7. know the composition of a retained earnings statement; 8. know about a ledger account, its different parts, the rules of debit and credit, and the meaning of the term normal balance of an account; 9. know about revenue recognition principle, matching principle, and time-period assumption; 10. know the computation net income under accrual accounting (revenuesexpenses); 11. know the meaning and purpose of adjusting entries, and the different types of adjusting entries; 12. know the difference between periodic and perpetual inventory systems; 13. know how to calculate net cost of purchases when terms of payment look like, for example, 3/10 n/45; 14. know the components of cost of merchandise inventory (e.g., invoice price less discount plus what other items are included?); 15. know the main points of difference among the four inventory cost-flow assumptions that you learned about; 16. know how to prepare a single-step and multiple-step income statement and calculate certain ratios based on the numbers in the income statement; and 17. know about an accounting information system and its components (e.g., ledger accounts, trial balance, etc.). For the essay question worth 25 points, you should 1. Know about a ledger account, its different parts, the rules of debit and credit, and the meaning of the term normal balance of an account; and 2. Know about an accounting information system and its components (e.g., ledger accounts, trial balance, etc.). For the problem question worth 35 points, you should

ACCT504 Midterm Exam Study Guide


1. know how to prepare a single-step and multiple-step income statement and calculate certain ratios based on the numbers in the income statement.. A good way to prepare for this exam in addition to reading Chapters 16 is to replay the Live Lectures and review the Illustrations and solutions for the problems listed below. Helpful Textbook Illustrations Illustration 1-1 on page 6 Illustration 1-2 on page 7 Illustration 1-8 on page 15 Illustration 1-9 on page 17 Illustration 2-1 on page 48 Illustration 2-2 on page 49 Illustration 2-3 on page 50 Illustration 2-4 on page 50 Illustration 2-5 on page 51 Illustration 2-6 on page 51 Illustration 2-7 on page 53 Illustration 2-8 on page 53 Illustration 2-9 on page 54 Illustration 2-11 on page 56 Illustration 3-2 on page 104 Illustration 3-3 on page 110 Illustration 3-4 on page 111 Illustration 3-15 on page 115 Illustration 3-16 on page 116 Illustration 3-34 on page 129 Illustration 4-1 on page 165 Illustration 4-2 on page 167 Illustration 4-23 on page 181 Illustration 4-25 on page 182 Illustration 4-26 on page 183 Illustration 4-33 on page 190 Illustration 5-1 on page 228 Illustration 5-2 on page 229 Illustration 5-4 on page 230 Illustration 5-6 on page 233 Illustration 5-7 on page 240 Illustration 5-8 on page 240 Illustration 5-9 on page 241 Illustration 5-11 on page 243 Illustration 5-12 on page 244 Illustration 5-15 on page 246 Illustration 5-17 on page 247 Illustration 6-1 on page 284

ACCT504 Midterm Exam Study Guide


Illustration 6-5 on page 288 Illustration 6-7 on page 289 Illustration 6-10 on page 291 Illustration 6-12 on page 292 Illustration 6-16 on page 297

Helpful Textbook Problems Problem 1-3A on page 35 Problem 1-4A on page 35 Exercise 2-4 on page 79 Exercise 2-7 on page 80 Exercise 3-1 on page 140 Exercise 3-16 on page 144 Problem 3-2A on pages 145 and 146 Exercise 4-4 on page 204 Exercise 4-13 on page 207 Exercise 5-7 on page 260 Problem 5-4A on pages 263 and 264 Exercise 6-4 on page 315