Midterm exam study test

Midterm exam study test Chapters 1,3,6,7,8 (important exam!)

• 67 test bank questions with answers
• 7 specific tips for actual test

Financial Accounting: Global Edition

Walter T Harrison 12 th edition 2023 English

9781292412900 

Pages: 25

Reading time: 90 min.

• x down to earth advice for final test >>> 1 / 7

1.Get the basics drilled in:

Know the 4 main financial statements inside out:

oIncome Statement → Performance (Revenue - Expenses = Net Income) oBalance Sheet → Position (Assets = Liabilities + Equity) oCash Flow Statement → Where’s the money coming/going?oChanges in Equity → Shows what’s up with shareholder investments If you remember these, you’ll never get totally lost.

2.The Accounting Equation is LIFE :

Assets = Liabilities + Equity.Tattoo this in your brain. Every single topic ties back to it, trust me.

3.Accrual vs. Cash Accounting :

oAccrual = When things happen, not when you pay or get paid.oCash = Cash moves, end of story.

4.Adjusting Entries Suck, But You’ll Survive :

These are for things like prepaid expenses and accrued revenues. Just

remember:

oPrepaid → Paid first, expense later.oAccrued → Use first, pay later.

5.FIFO vs. LIFO:

oFIFO → First in, first out (oldest stock goes out first).oLIFO → Last in, first out (newest stock goes out first).FIFO is super common, so don’t overthink it.

6.Focus on Key Formulas :

Some critical ones are:

oGross Profit = Sales Revenue - COGS oAverage Cost = Total Cost of Units / Total Units Available

7.Don’t Cram Definitions:

Instead, focus on understanding why things happen. Like, why do we adjust entries? Why is accrual better? If you get the logic, you’ll remember the details. 2 / 7

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