BUSA 101 - Schmidt

Review for Test 4

Chapters 11 – 13

 

 

This test will cover three fairly difficult chapters.  Major topics covered on this exam include the following:

 

Chapter 11

• Corporations:  What they are, characteristics, and terms and definitions relating to Corporations
• Different types or classes of stock
• Dividends:  Calculating and Accounting for Dividends
• Sources of Paid In Capital and accounts and journal entries related to the sources
• Treasury Stock Basics
• Stock Split Basics
• Parts of the Equity Section on a Balance Sheet

 

Chapter 12

• Tax Issues:  GAAP Tax versus IRS tax and the resulting deferral (or accrual)
• Unusual items above the line: fixed asset impairment, restructuring charges
• Unusual items below the line: Discontinued Operations, extraordinary items, changes in acct. principles
• Accounting for Investments in Stock:  Short Term and Long Term

 

Chapter 13

• Bonds: Terms and Definitions - Characteristics of Bonds
• How the pricing works with fluctuations in interest rates
• The Concept of Present Value and how to use the tables
• Accounting for Bonds:  JE’s for issuance, interest, and amortization of discounts and premiums – BOTH SIDES – issuer and investor

 

Format of Exam:  30 multiple choice questions.  You will be allowed to choose FOUR of the following six problems and you will prepare complete solutions:

• Distribution of dividends and calc of div per share
• Tax problem calculating GAAP tax, IRS tax, and deferral
• Preparation of an equity section on a balance sheet
• JE’s for issuance of bonds:  issuance, interest, and amortization
• JE’s for Investments in Stock (long term)
• JE’s for Investments in Bonds (Investor’s side)