301 Final Exam
1. (TCO 1) What is the accounting equation?
Suppose your company sold $12,000 in merchandise to a customer for cash. How
does this transaction impact the accounting equation?
2. (TCO 2) What are the four basic financial
statements? Describe the balance sheet, and explain why it is important
3. What is the Sarbanes-Oxley Act? Do you
think this act has more importance for the accounting profession or for
4. Whatis horizontal analysis of financial
statements? How does horizontal analysis differ from vertical analysis?
5. (TCO 8) Why is capital budgeting
important? What is the IRR method? How is it calculated?
6. (TCO 9) What are five different types of
decisions that could use incremental analysis? What are the relevant costs in a
7. (TCO 10) How is a transfer price
determined? Describe the cost-based method. Do you think it is better than the
8. (TCO 11) What are direct materials? Give an
example of a direct material. How do direct materials differ from indirect
materials? Give an example of an indirect material.
9. (TCO 5) What is CVP analysis? Why is this
an important analysis for a company to perform?
10. (TCO 6) What is an operating budget? What
does it result in? What is the first step in completing an operating budget ?
11. (TCO 7) What is responsibility accounting?
What is a cost center? How does a cost center differ from a profit center?