Accounting for Decision Makers C213
Study Guide – With Complete Solution
Latest Update.
,C213 Study Guide Solutions Table of Contents
Chapter 1: Nature and Purpose of Accounting.............................................................1
Describe the purpose of accounting..........................................................................1
Describe the three financial statements..................................................................1
Identify users of financial statements for a particular situation.....................1
Identify U.S. accounting rules and their origins....................................................2
Differentiate the roles of important accreditation organizations...................3
Describe current trends that are causing changes in the field of
accounting...........................................................................................................................3
Chapter 2: Overview of Financial Statements...............................................................3
Identify the purposes of financial statements in specific situations.............3
Identify components of a balance sheet..................................................................4
Use the accounting equation to calculate total assets, total liabilities, or
total stockholders’ equity.
.................................................................................................................................................
5
Identify components of the income statement.....................................................5
Identify components of the cash flow statement.................................................6
Explain the purpose of notes to financial statements........................................6
Describe the purpose of an external audit..............................................................7
Explain the concepts of comparability, conservatism, materiality, and
articulation...........................................................................................................................7
Chapter 3: Introduction to Financial Statement Analysis.........................................8
Recognize the purpose of financial statement analysis and financial
ratios......................................................................................................................................8
Compute widely used financial ratios.......................................................................8
Interpret widely used financial ratios........................................................................8
Calculate cash flow ratios for a given situation.....................................................8
Chapter 4: The Balance Sheet
.......................................................................................................................................................
12
Identify the order of assets, liabilities, and stockholders’ equity accounts
on a balance sheet
...............................................................................................................................................
12
Record the proper values for items on a balance sheet in a particular
situation
...............................................................................................................................................
, 14
Chapter 5: The Income Statement
.......................................................................................................................................................
15
Describe the purpose of net income on an income statement
...............................................................................................................................................
15
Prepare a simplified income statement
...............................................................................................................................................
15
Explain when revenues and expenses are recognized for a particular
situation
...............................................................................................................................................
15
Analyze the impact of revenue transactions on the expanded accounting
equation and financial statements.
...............................................................................................................................................
16
Evaluate a historical income statement to forecast a future income
statement
...............................................................................................................................................
16
Chapter 6: The Statement of Cash Flows
.......................................................................................................................................................
17
Describe the purpose of the statement of cash flows.
...............................................................................................................................................
17
Identify the categories of a cash flow statement and cash flow activities
included in each category.
...............................................................................................................................................
17
Prepare a simplified statement of cash flows.
...............................................................................................................................................
18
Describe the differences between the direct and indirect methods of the
cash flow statement
...............................................................................................................................................
19
Analyze a statement of cash flows to identify operating, investing, or
financing activities.
...............................................................................................................................................
19
, Chapter 7: Cash Budgeting
.......................................................................................................................................................
20
Evaluate a company’s credit policy.
...............................................................................................................................................
20
Calculate cash collections from cash and credit sales based upon
collection history.
.
...............................................................................................................................................
20
Calculate cash payments for disbursement based upon a company’s
payment policy.
...............................................................................................................................................
21
Chapter 8: Internal Controls
.......................................................................................................................................................
22
Identify common financial statement errors.
...............................................................................................................................................
22
Recommend the proper internal controls to prevent accidental loss or
intentional theft or fraud for a particular situation
...............................................................................................................................................
22
Identify motivations and common techniques used to manage earnings.
...............................................................................................................................................
22
Explain the effect of the Sarbanes-Oxley Act on financial reporting
...............................................................................................................................................
23
Describe the role of auditors and their impact on the integrity of financial
statements.
...............................................................................................................................................
24
Explain the role of the U.S. Securities and Exchange Commission (SEC) in
financial reporting
...............................................................................................................................................
24
Chapter 9: Managerial Accounting and Cost Concepts
.......................................................................................................................................................
25
Describe the purpose of management accounting
...............................................................................................................................................
Study Guide – With Complete Solution
Latest Update.
,C213 Study Guide Solutions Table of Contents
Chapter 1: Nature and Purpose of Accounting.............................................................1
Describe the purpose of accounting..........................................................................1
Describe the three financial statements..................................................................1
Identify users of financial statements for a particular situation.....................1
Identify U.S. accounting rules and their origins....................................................2
Differentiate the roles of important accreditation organizations...................3
Describe current trends that are causing changes in the field of
accounting...........................................................................................................................3
Chapter 2: Overview of Financial Statements...............................................................3
Identify the purposes of financial statements in specific situations.............3
Identify components of a balance sheet..................................................................4
Use the accounting equation to calculate total assets, total liabilities, or
total stockholders’ equity.
.................................................................................................................................................
5
Identify components of the income statement.....................................................5
Identify components of the cash flow statement.................................................6
Explain the purpose of notes to financial statements........................................6
Describe the purpose of an external audit..............................................................7
Explain the concepts of comparability, conservatism, materiality, and
articulation...........................................................................................................................7
Chapter 3: Introduction to Financial Statement Analysis.........................................8
Recognize the purpose of financial statement analysis and financial
ratios......................................................................................................................................8
Compute widely used financial ratios.......................................................................8
Interpret widely used financial ratios........................................................................8
Calculate cash flow ratios for a given situation.....................................................8
Chapter 4: The Balance Sheet
.......................................................................................................................................................
12
Identify the order of assets, liabilities, and stockholders’ equity accounts
on a balance sheet
...............................................................................................................................................
12
Record the proper values for items on a balance sheet in a particular
situation
...............................................................................................................................................
, 14
Chapter 5: The Income Statement
.......................................................................................................................................................
15
Describe the purpose of net income on an income statement
...............................................................................................................................................
15
Prepare a simplified income statement
...............................................................................................................................................
15
Explain when revenues and expenses are recognized for a particular
situation
...............................................................................................................................................
15
Analyze the impact of revenue transactions on the expanded accounting
equation and financial statements.
...............................................................................................................................................
16
Evaluate a historical income statement to forecast a future income
statement
...............................................................................................................................................
16
Chapter 6: The Statement of Cash Flows
.......................................................................................................................................................
17
Describe the purpose of the statement of cash flows.
...............................................................................................................................................
17
Identify the categories of a cash flow statement and cash flow activities
included in each category.
...............................................................................................................................................
17
Prepare a simplified statement of cash flows.
...............................................................................................................................................
18
Describe the differences between the direct and indirect methods of the
cash flow statement
...............................................................................................................................................
19
Analyze a statement of cash flows to identify operating, investing, or
financing activities.
...............................................................................................................................................
19
, Chapter 7: Cash Budgeting
.......................................................................................................................................................
20
Evaluate a company’s credit policy.
...............................................................................................................................................
20
Calculate cash collections from cash and credit sales based upon
collection history.
.
...............................................................................................................................................
20
Calculate cash payments for disbursement based upon a company’s
payment policy.
...............................................................................................................................................
21
Chapter 8: Internal Controls
.......................................................................................................................................................
22
Identify common financial statement errors.
...............................................................................................................................................
22
Recommend the proper internal controls to prevent accidental loss or
intentional theft or fraud for a particular situation
...............................................................................................................................................
22
Identify motivations and common techniques used to manage earnings.
...............................................................................................................................................
22
Explain the effect of the Sarbanes-Oxley Act on financial reporting
...............................................................................................................................................
23
Describe the role of auditors and their impact on the integrity of financial
statements.
...............................................................................................................................................
24
Explain the role of the U.S. Securities and Exchange Commission (SEC) in
financial reporting
...............................................................................................................................................
24
Chapter 9: Managerial Accounting and Cost Concepts
.......................................................................................................................................................
25
Describe the purpose of management accounting
...............................................................................................................................................
