BUSA 101 – Fund of Acct (Financial)

Exam #2 – Chapters 5 – 7

Merchandising, Inventory, Internal Controls and Cash

STUDY!!!!

This test will cover many new topics. You should adequately prepare for your exam keeping that in mind. Whereas the first test was mostly a review of topics covered in BUSA 100, this test covers many new topics.

The test is comprised of 30 multiple choice questions worth 2 points each. In addition there are SIX problems, from which you will select and complete FOUR. Each one is worth 10 points, comprising a problems section point total of 40 points. If you select more than four, then only the first four will be graded.

The problems are as follows:

• Journal Entries from the perspective of Seller AND Buyer
• A bank reconciliation
• A multi-step income statement and retained earnings statement
• Computation of Inventory and COGS using both FIFO and LIFO
• An essay question on internal controls
• An estimation of inventory using either the retail or gross profit method

Topics covered are from throughout the three chapters. A list of some (but not all) of the topics covered on the exam are as follows: Parts of and computation of various subtotals on a multi-step income statement, JE’s on the seller’s books and on the buyer’s books, account identification, classification on financial statements of major topics, Inventory costing and counting, calculation of inventory and COGS of both perpetual and periodic systems using FIFO, LIFO, and Average Cost, theory questions about cost flow assumptions used with different inventory valuation methods, errors in inventory, estimating inventory using retail and gross profit methods, inventory valuations at other than cost, internal control components, bank reconciliation, JE’s required for bank reconciliations, Sarbanes Oxley, etc.