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REVIEW FOR EXAM 1: ACCT 5301
• Four basic financial statements, their objectives, and their relationships.
• Assets, Liabilities, Owners’ Equity and their respective accounts.
• Users of financial statements (internal and external)
• GAAP, IFRS, and regulating bodies
• Management responsibility with regard to financial reporting
• Auditors’ responsibilities
• Objective of financial reporting and qualitative characteristics
• Operating, investing, and financing activities (know what they are)
• Accounting cycle
• Transaction analysis, journal entries, and account balances
• Revenues, expenses, gains, and losses
• Revenue principle and matching principle
• Adjusting entries (unearned revenues, accrued revenues, prepaid expenses, accrued expenses)
• Trial balance and what is the purpose.
• Closing entries.
• Board of directors and audit committee
• Content of an annual report
Format: 40 multiple choice questions (80 pts) + 1 problem (20 pts)
What to bring: non programmable calculator and scantron

ACCT 5301-002 Practice for Exam 1
McBride Company started operation in 2010. These transactions happened during the year.
1. Owner invested $100,000 cash in the company and received common stocks in return on Jan 1.
2. Purchase $30,000 of equipment on April 1 for cash.
3. Performed a service to customer on account for $8,000 on April 10.
4. Received $2,500 customer payment on May 5 for the amount they owed in the previous month.
5. Borrowed $50,000 from a bank with 12% interest rate on July 1 to be repaid in full (include interest) next year.
6 Received $15,000 from a customer on Nov. 1 for services to be performed over 3 months.
7. Purchase a track of land for $75,000 on Dec. 31, paying $20,000 cash and the remaining on notes payable. I. Prepare the journal entries:
1. 5.

2. 6.

3.

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