Fundamentals of Accounting Study Guide (2014)

Module 1 (8-10%)
Basic concepts and Analysis of Financial Statements including the Return on Assets broken out by margin
and turnover as well as Business Analysis (pages 10-23)

Module 2 (20-30%)
Basic knowledge of the financial statements and the accounts appearing on the balance sheet and
income statement. Recognition criteria for revenues and expenses and the major categories on the
statement of cash flows-operating, investing, and financing activities
Recording transactions such as 1-6 on pages 26-28.

Skip Module 3

Module 4 (20-25%)
Calculating ROE with the emphasis on totals rather than distinguishing between operating and nonoperating amounts
Debt versus equity financing
Limitations of ratio analysis

Appendix 4B Liquidity and Solvency

Current ratio, quick ratio, liabilities to equity and times interest earned

Appendix 4C
ROA and disaggregation into components such as in Exhibit 1 (page 36)

Module 5 (15-20%)
Knowledge of Income Statement Components
Ignore percentage of completion, income taxes and foreign currency. Focus on R&D and restructurings
as well as discontinued and extraordinary items and accounting quality

Module 6 (30-35%)
Major emphasis on accounting for receivables, inventories, and plant and equipment
Estimating bad debt expense and related balance sheet accounts as well as receivables turnover, etc.
Inventory valuation including costing assumptions and types of analysis, ie. Inventory turnover
Terminology such as Lifo liquidations and Lifo reserve
Property. Plant & Equipment including capitalization versus expensing, depreciation methods and
analysis
Review all problem material discussed in class and included in canvas