ACCT 2101 Exam 2 Key Topics: Chapters 4, 5, and 6

Comprehensive vocabulary flashcards covering the core concepts, methods, ratios, and regulations outlined in the ACCT 2101 Exam 2 Key Topic List for Chapters 4, 5, and 6.

Fraud Triangle

A framework highlighted in Chapter 4 that consists of three specific elements related to fraud.

Sarbanes Oxley Act of 2002

A key legislative act covered in Chapter 4 concerning internal controls and their five components.

Internal Controls

A system covered in Chapter 4 characterized by five components, preventative controls, and detective controls.

Preventative Controls

A classification of internal controls covered in Chapter 4 alongside detective controls.

Detective Controls

A classification of internal controls covered in Chapter 4 alongside preventative controls.

Cash and Cash Equivalents

The liquid asset category covered under Chapter 4 alongside internal controls.

Bank Reconciliation

A procedure in Chapter 4 that involves reconciling bank and company records and recording corresponding journal entries.

Statement of Cash Flows

A financial statement that classifies business activities into three categories: operating, investing, and financing.

Operating Activities

One of the three categories of business activities on the statement of cash flows used to calculate net cash flows.

Investing Activities

One of the three categories of business activities on the statement of cash flows used to calculate net cash flows.

Financing Activities

One of the three categories of business activities on the statement of cash flows used to calculate net cash flows.

Net Revenues

A revenue measure in Chapter 5 calculated by accounting for sales on account, sales returns, sales allowances, and sales discounts.

Notes Receivable

A form of receivable in Chapter 5 requiring interest calculations and the preparation of corresponding journal entries.

Direct Write-Off Method

A method to account for uncollectible accounts receivable requiring a specific journal entry.

Allowance Method

A method to account for uncollectible accounts receivable that involves specific journal entries, calculations, and computing net accounts receivable.

Net Accounts Receivable

A financial figure calculated in connection with the allowance method for uncollectible accounts.

Receivables Turnover Ratio

One of the two financial ratios covered in Chapter 5 (Receivables & Sales).

Average Collection Period

One of the two financial ratios covered in Chapter 5 (Receivables & Sales).

COGS

Cost of Goods Sold, a key topic studied in Chapter 6 alongside inventory.

Multi-Step Income Statement

A structured income statement format presented in Chapter 6 (Inventory & Cost of Goods Sold).

Inventory Costing Methods

The methods covered in Chapter 6—specific identification, FIFO, LIFO, and Weighted average—used to calculate ending inventory and cost of goods sold.

Specific Identification

One of the four inventory costing methods covered in Chapter 6.

FIFO

An inventory costing method used to calculate ending inventory and/or cost of goods sold, evaluated for financial statement and tax impacts.

LIFO

An inventory costing method used to calculate ending inventory and/or cost of goods sold, evaluated for financial statement and tax impacts.

Weighted Average

An inventory costing method used to calculate the dollar amount of ending inventory and/or cost of goods sold.

FOB Shipping Point

A freight terminology term covered in Chapter 6 regarding inventory shipping.

FOB Destination

A freight terminology term covered in Chapter 6 regarding inventory shipping.

Lower of Cost and Net Realizable Value

An inventory valuation rule covered in Chapter 6.

Inventory Turnover Ratio

One of the three financial ratios covered in Chapter 6 (Inventory & Cost of Goods Sold).

Average Days in Inventory

One of the three financial ratios covered in Chapter 6 (Inventory & Cost of Goods Sold).

Gross Profit Ratio

One of the three financial ratios covered in Chapter 6 (Inventory & Cost of Goods Sold).