Gr 11 Accounting Exam Review 2025 PDF

BAF3M Exam Review MARKS: ​​ ​ ​ TIME RECOMMENDATION:​ ​ Part A: True/False​ 25​ 25 Minutes Part B: Multiple Choice​ 25​ 35 Minutes Part C: Problem Solving ​ 40​ 50 Minutes Part D: Review​ ​ ​ 10 Minutes Total​ ​ 9...

BAF3M Exam Review MARKS: ​​ ​ ​ TIME RECOMMENDATION:​ ​ Part A: True/False​ 25​ 25 Minutes Part B: Multiple Choice​ 25​ 35 Minutes Part C: Problem Solving ​ 40​ 50 Minutes Part D: Review​ ​ ​ 10 Minutes Total​ ​ 90​ 120 Minutes (2 hours) Part A and B: True/False & Multiple Choice Knowledge is based on: ​ GAAPs (review handout) ​ Types of Accounts (CA, FA, CL, LTL, OE, Contra Accounts) ​ Order of Liquidity, Maturity ​ Ledger, PR, Posting, Account Numbers ​ Declining Balance vs Straight Line method ​ Net Sales, Gross Profit, Net Income, operating expenses ​ Balance Sheet & Income Statement Formation o​ Single underline, double underline, what each column means ​ Fundamental Accounting Equation Diagram/Chart Analysis ​ Based on analyzing Total Liabilities & Total Assets. ​ Know how to calculate Net Income & Gross Profit Worksheet Analysis based on: ​ Knowing what each total represents ​ How to make the appropriate adjustment calculation Part C: Problem Solving ​ Financial Statement Analysis based on (Review hand out) ​ How to calculate the COGS (on the Income Statement) ​ How to create a Classified Balance Sheet Review all lessons, tests, quizzes, handouts.  Accounting Exam Review GAAP’s - generally accepted accounting principles 1.​ Business entity concept The accounting for a business or organization is kept separate from the personal affairs of its owner, other businesses, or organizations. 2.​ Continuing concern concept Assumes that a business will continue to operate unless it is known otherwise 3.​ Principle of conservatism The accounting for a business should be fair and reasonable. The results should not overstate nor understate the business 4.​ Objectivity principle The accounting will be recorded on objective evidence. Different people looking at the evidence will arrive at the same value for the transaction. This evidence is called a source document 5.​ Revenue recognition principle Revenue is recorded when it is earned, not necessarily when cash changes hands 6.​ matching/expense principle Costs that generate revenue must be recorded in the same accounting period as the revenue they generated, not necessarily when they are paid for 7.​ Time period concept Accounting takes place over specific time periods known as fiscal periods. The fiscal periods should be of equal length when used to measure the financial progress of the business 8.​ Cost principle Items are recorded in the books at the historical cost paid by the purchaser and do not change from their original value 9.​ Consistency principle Accountants should apply the same methods and procedures from period to period. When changes are made, they must be explained clearly on the financial statements. This allows for comparability from period to period 10.​Materiality principle Accountants must use GAAPSs except when doing so would be prohibitively expensive, difficult, and would make little significant difference in the final reported results of the business 11.​Full disclosure principle Any and all information that affects the full understanding of a company's financial statements must be included with the financial statements Types of Accounts 1.​ Current Assets Assets that can be converted into cash within a year, sold, or consumed within a year Listed in order of liquidity* ​ → cash, accounts receivable, prepaid expenses, supplies, merchandise inventory 2.​ Fixed assets Assets used in the operation of a business and with a useful life of over one year Listed in order of longest life ​ → land, buildings, equipment, trucks, furniture 3.​ Current liabilities Liabilities that must be paid within a year or less Listed in the order of maturity ​ → accounts payable, salaries payable, HST, current portion of mortgage payable 4.​ Long term liabilities Liabilities that are not due to pay within a year Listed in the order of maturity* ​ → loan payable, mortgage payable 5.​ Owners equity Capital - the net worth of a business, assets-liabilities Drawings - the owner's withdrawals from a business Revenue - money earned from sale of goods or services Expenses - costs to operate a business 6.​ Contra accounts Accounts that are ‘married’ to each other, but are contrary to each other. On the worksheet, one appears as a credit and the other as a debit. ​ → drawings & capital ​ → HST recoverable & HST payable ​ → accounts receivable & allowance for doubtful accounts ​ → asset & accumulated amortization for asset *Liquidity: how easily something can be converted to cash *Maturity: when a liability is due to be paid for Journalizing General ledger: -​ where transactions from the general journal are recorded in each individual account -​ You have to write forwarded at the end of each page, and at the beginning of the next to show you are carrying over relevant information PR: stands for Posting Reference. Shows what chart of accounts number each account is Chart of Accounts: numbers used to identify accounts Assets: 100-199, in order of liquidity Liabilities: 200-299, in order of maturity Owners equity: 300-399, capital + drawings Revenue: 400-499, list core revenues first (most to least money) Expenses: 500+, alphabetical order ​ → COGS expenses: 500-599 ​ → operating expenses: 600-699 Adjustments - amortizations ⚬ amortization: the allocation of the cost of fixed asset to expense at a predetermined rate overtime 1.​ The straight line method ⚬ same amount of depreciation is allocation to each fiscal period (Purchase price - salvage value) * can be no salvage value = amortization expense for year * if fiscal period is Years of use monthly, divide by 12  2.​ Declining balance ⚬ asset depreciates at a percentage, so it is different every year (Purchase price - accumulated amortization) x rate = amortization expense for year For example… A piece of equipment worth $12,000 depreciates at 20% per year for 5 years. Year 1: Year 2: Year 3: 12 000 x %20 = 12 000 - 2400 = 9600* 9600 - 1920 = 7680 2400 9600 x %20 = 1920 7680 x %20= 1536 * 9600 is the new value of the asset after depreciation Net sales: the total sales revenue after subtracting purchase returns and allowances and purchase discounts, but before subtracting the cost of goods sold expenses. Net sales = sales - sales discounts - sales returns and allowances * on perpetual and periodic inventory income statements only, not for service business Gross profit: the total sales revenue a business generates after cost of goods sold, but before subtracting the operating expenses ​ Gross profit = net sales - cost of goods sold * on perpetual and periodic inventory income statements only, not for service business Net income: the final total on an income statement. The amount of income a business brings in after subtracting revenue - expenses ​ Net income = gross profit - expenses (in a merchandising business) ​ Net income = revenue - expenses (in a service business) Operating expenses: costs associated with running a business Basically… Sales - sales discounts - sales returns & allowances = net sales (Sales - sales discounts - sales returns & allowances) - COGS = gross profit (Sales - sales discounts - sales returns & allowances) - (COGS) - expenses = net income Making balance sheets and & income statements Single underline: subtotals Double underline: final totals Column 1: contra accounts Column 2: account balances Column 3: subtotals and final totals examples:​ Solutions Perpetual end of cycle review.pdf 4.1 Periodic Inventory End of Cycle #1.pdf End of Service Cycle #2 (2) (1).pdf Fundamental accounting equation Assets - liabilities = owners equity Assets: anything a business owns Liabilities: anything a business owes Owners equity: net worth of a business Cost of Goods sold equation Beginning inventory + (purchases - discounts, returns, and allowances) - freight in + ending inventory. COGS BI + (P - D, R, A) - FI - EI = COGS Classified balance sheet