ACCT 2310 - L.

Young
Review for Comprehensive Final Exam

New Material (approximately 25% of final exam)

I.Chapter 10
A. Issuance of bond with a discount or premium
1. Amortization using straight-line method
2. Journal Entry on interest payment date.
3.Balance of premium or discount at maturity.

B.Installment notes with equal total payments

1. Calculation of payment amount
2. Amortization table to determine amount of principal and interest paid
3. Journal entries at issuance and payment dates
4. Understanding of change in component of payment over time (interest portion
decreases and principal portion increases)
C. Installment notes with equal principal payments
D. Calculation of amount of principal payments
E. Amortization table to determine amount of principal and interest paid

II. Chapter 11

1. Characteristics of a corporation including advantages and disadvantages.

2. Characteristics of a general partnership including advantages and disadvantages (see class

notes)

3. Rights of stockholders

4. Basics of Capital Stock including terminology.

Know difference in “Authorized,” “Issued,” “Treasury” and “Outstanding”
(Know how to calculate amount “Outstanding.”)
(Know which amount to use for calculation of dividends and EPS.)

5. Issuance of common stock with par value, no-par value, or stated value – know journal
entries

6. Preferred stock: nature of preferences (dividend preference and liquidation preference)

7. Know order of payments upon liquidation to creditors and stockholders (see class notes).

8. Preferred stock: cumulative versus noncumulative; be able to determine amount of

dividend preference and calculation of the allocation of dividends to common and
preferred. (For example, E11-5 and 6)

9. Cash dividends:
Know significance of date of declaration, date of record, and date of
payment.
(When do they become a liability?)
(Who determines whether they will be paid or not and timing of payment?)
 10. Treasury stock transactions:
Know journal entries for purchasing and reissuing.
Know what types of account both “Treasury stock” and “Contributed
Capital, Treasury stock” are.

11. Earnings per Share: Be able to calculate

Portions of Chapter 11 NOT ON FINAL

Stock dividends, pg 451- 453
Stock splits, pg 453
Reporting Income and Equity, pg 456 to 457
Stock options, pg 460
Statements of Ret Earn, pg 460
Statement of stockholders equity, pg 461
Page 462 -464

Material Studied Prior to Exam #3 (approximately 75% of exam)

III.Chapter 1
A.Generally Accepted Accounting Principles (GAAP)
B.Principles of Accounting – pages 9 and 10.
C.Accounting Equation and Transaction Analysis (effect of business transactions on the
accounting equation)
D.Financial Statements – Format and preparation of the Income Stmt., Balance Sheet, Stmt of
Ret. Earnings
E.Demonstration problem at end of chapter.
F.Not covered was the Statement of Cash Flows.

IV.Chapter 2
A.Accounting books and records – Account, ledger, trial balance
B.Assets, liabilities, revenues, expenses, equity, dividends accounts
C.Double-Entry Accounting/Characteristics of an Account
1.debits and credits
2.Normal balances of each account type, increases and decreases of each account type
D.Accounting Process – Journal entries/Posting to Ledger/Trial Balance/Financial Statements
E.Demonstration problem at end of chapter.

V.Chapter 3
A.Accrual Basis versus Cash Basis
B.Accounting Period Concept
C.Adjustment Process – Deferrals and Accruals
D.Revenue is recognized when earned and expenses matched with revenues (matching
principle)
E.Closing Entries (all temporary accounts are closed)
F.Post-Closing Trial Balance
G.Overall Accounting Cycle – Journal entries/Posting to Ledger/Trial
Balance /Adjustments/Adjusted Trial Balance /Financial Statements/ Closing
Entries/Post-Closing Trial Balance
H.Demonstration problem at end of chapter.
VI.Chapter 4 – Merchandising Operations
A.Significance of inventory and determination of inventory cost.
B.Different format of income statement (including calculation of gross profit and key steps in
the Multi-step income statement)
C.Journal entries for sales and purchases – summary on page 164.
D.Treatment of freight by buyer versus seller.
E.Treatment of purchase discounts.
F.Demonstration Problem II on page 171

VII.Chapter 5 – Inventories
A.Inventory Costing under Perpetual System using Specific Identification, FIFO, LIFO, and
weighted average methods.
B.Financial Statements Effects of Costing Methods
C.Lower of Cost or Market rule
D.Demonstration problem at end of chapter.

VIII.Chapter 6 – Cash and Internal Controls

A.Purpose and principles of internal control
B.Limitation of internal control
C.Preparation of a bank reconciliation and related journal entries
D.See homework.

IX.Chapter 7 – Receivables
A.Allowance Method of Accounting for Receivables – know entries using the percent of
receivables method (page 285).
B.Accounting for Notes Receivable including interest accrual at year-end
C.See homework.

X.Chapter 8 – Long-Term Assets

A.Nature of fixed assets and cost concept of recording
B.Purpose of recording depreciation (matching by allocation of cost to periods of useful life)
C.Depreciation methods – Straight-line, declining balance, units of production
D.Terms – cost, salvage value, book value, depreciation expense, accumulated depreciation
E.Disposal by discarding or selling
1.Calculation of gain or loss and 2. Entry to record
F.Exchanging – defer gain, record loss
G.Method used for natural resources
H.See homework.

XI.Chapter 9 – Current Liabilities

A.Accounting for short-term notes payable – at issue date, interest accrual, and on date paid
off.
B.Contingent liabilities. See rules on page 364 for reporting if remote, possible, or probable.
C.Nature of payroll deductions for employee and employer.
XII.Chapter 10 – Long-term Liabilities
A.Bonds
1.Terminology related to bonds
2.Recording issuance of bonds and any related premium or discount.
3.Understand what causes issuance at a premium(stated rate above market rate) or discount
(stated rate below market rate)
4.Determination of amount of cash interest payment (use stated rate)
5.Calculation of issue price using present value tables.

XIII.Appendix B
A.Calculation of the PV or FV of $1 as studied using tables
B.Calculation of the PV or FV of an annuity as studied using tables