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Exam #2 Study Sheet

Chapter 6

What is the difference between simple and compound interest?

Which tables for present/future values would you use to compute different amounts?

What is "discounting"?

What is the difference between a ordinary annuity, an annuity due, and a deferred annuity?

Determine the selling price of a bond

What is present value? What is future value?

Compute various present and future value amounts

Textbook problems: P6-4, E6-3, E6-4, E6-10, E6-13

Chapter 7

What is the different between cash and cash equivalent? What are some examples?

What is a compensating balance?

How do you classify bank overdrafts?

What are cash discounts and what are trade discounts? Are they accounting for the same?

Journal entries for discounts using net and gross methods.

What are various methods for accounting for bad debts?

What are the journal entries for recording the allowance and write offs? What are the journal entries for an amount that is collect that was previously written off?

What is the difference between a sale of a/r with recourse and without recourse?

What are the journal entries?

Textbook problems: E7-5, E7-6, E7-8, E-7-9, E7-16, E7-17

Chapters 8 & 9

What is the difference between periodic and perpetual systems?

What are the journal entries different under each method?

What are the various cost flow assumptions?

Compute cost of goods sold and ending inventory under each method.

What is the lower of cost or market (LCM)?

Compute LCM and what are the journal entries?

What is dollar value LIFO? Compute ending inventory under dollar-value lifo.

What is a purchase commitment? When record loss? What is the journal entry?

What are two commonly used methods for estimating ending inventory?

Textbook problems: E8-9, E8-13, E8-14, E8-15, E8-25

Textbook problems: E9-2, E9-3, E9-4, E9-9

What the test won't specifically include:

Deferred annuities - you will not have to compute the value of a deferred annuity,...