Summary
Summary Acc 3000 Final Exam Review
- Course
- ACC 3000
- Institution
- Baruch College
This is a comprehensive and detailed review on final exam for Acc 3000. *Essential Study Material!!
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ACC 3000 Final ExamChapter 1: Financial Accounting Environment & Theoretical Structure
● Financial Accounting Environment: convey financial information to external users
● Types of Business Organizations: corporation, partnership, sole proprietorship
● Cash vs. Accrual Accounting
● Financial Accounting Reporting Standards: GAAP and IFRS
● Accounting Qualitative Characteristics:
○ Relevance: Predictive, Confirmatory, Materiality
○ Faithful Representation: Completeness, Neutrality, Free from error
○ Conservatism
○ Enhancing Qualities: Comparability/Consistency, Verifiability, Timeliness,
Understandability
○ Constraints: Cost Effectiveness
○ Basic Assumptions: Economic Entity, Going Concern, Periodicity,
Monetary Unity
○ Principles: Revenue Recognition/Realization, Expense
Recognition/Matching
○ Measurement: Historical Cost, Net Realizable Value (NRV), Current Cost,
Present Value of future cash flows, Fair Value
○ Full Disclosure Principle
Chapter 2: The Accounting Process
● Accounting Equation: Assets = Liabilities + Stockholders’ Equity
● Accounting Cycle:
1) Analyze the transaction
2) Record the transaction in a journal
3) Post from the journal to the general ledger
4) Prepare an unadjusted trial balance
5) Record adjusting entries: Deferred Revenue, Prepaid Expenses, Accrued
Revenue, Accrued Expenses, Estimates
6) Adjusted trial balance
7) Prepare financial statements: Income Statement, Balance Sheet,
Statement of Cash Flows, Statement of Stockholders’ Equity
8) Closing entries: Revenues, Expenses, Dividends → Retained Earnings
9) Post-closing trial balance
● Conversion from Cash Basis → Accrual Basis
, Chapter 6: Revenue Recognition
● Revenue Recognition: single point in time vs. over a period of time
● Goods in transit: FOB shipping point vs. FOB destination
● Recognizing Revenue:
1) Identify the contract
2) Identify the performance obligation(s)
3) Determine the transaction price: expected value vs. most likely amount,
right of return
4) Allocate the transaction price: adjusted market assessment approach,
expected cost plus margin approach, residual approach
5) Recognize revenue when each performance obligation is satisfied:
license, franchises, bill-and-hold arrangements, consignment, gift card
sales
● Long-term Contracts:
○ Recognize revenue upon completion of contract
○ Recognize revenue over time according to % of completion
○ Overall Profit, Periodic Loss, Overall Loss
Chapter 7: Cash & Receivables
● Cash and Cash Equivalents: maturity of 3 months or less
● Restricted Cash: classified as investment or other assets (compensating
balance)
● Account Receivables: Gross Method vs. Net Method
● Uncollectible Accounts: Direct Write-off Method vs. Allowance Method
● Bad Debt Expense: Income Statement Approach (% of Sales Method), Balance
Sheet Approach (Accounts Receivable Aging Schedule)
● Notes Receivable: Interest-bearing, Non-interest bearing (implicit interest),
Long-term notes receivable
● Financing with Receivables:
○ Secured Borrowing: Assigning, Pledging
○ Sale of Receivables: Factoring without recourse, Factoring with recourse,
Discounting a note
Chapter 8: Inventory Measurement
● Perpetual vs. Periodic Inventory Systems
● Purchase Discount Gross vs. Net Methods
● Cost Flow Assumptions: FIFO, LIFO, Average Cost
● Dollar Value LIFO (DVL)
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