1. Be able to describe the primary objectives of financial accounting.

2. Explain operating, investing, and financing activities.

3. Understand some of the key aspects that distinguish a corporation from other forms of business ownership. 

4. Know some of the key issues as they relate to accounting, such as What are the Rules (GAAP) of Accounting?, who creates them, and some key examples such as the matching principle, the cost concept, the time period assumption, etc.

5. Know the accounting equation and how it expands to include Revenue, Expenses, and Dividends.

6. Know the major account categories (Assets, Liabilities, etc.) and be able to identify the accounts that belong to each category.

7. Understand risk & return and be able to make investment choices accordingly.

8. Understand how and why a business transaction affects the accounting equation.

9. Be able to identify source documents to which journal entries they relate.

10. Know the four required financial statements, the order in which they are prepared, and why.

11. Be able to prepare an Income Statement, Statement of Retained Earnings, & Balance Sheet.

12. Know the two major accounting “books” and what goes into each.   Understand the chart of accounts and the trial balance.

13. Know the rules of debits and credits. Know the normal balances of accounts and how to record increases & decreases.

14. Be able to record journal entries for opening & running a business and know how to post them to T-accounts, all in proper form.

15. Understand how the trial balance works and where we get the information to prepare it. If given a set of information, you should be able to generate a trial balance in proper form.

16. Understand how an error on a trial balance will affect the financial statements (what accounts would be overstated and/or understated). 

17. Understand the difference between cash and accrual accounting. Be aware of why we use accrual accounting for large businesses and some of the key concepts that relate to it.

18. Understand the nature and process of adjusting entries. Know the four major categories of adjustments (Deferred Expenses, Accrued Revenues, etc.). Know how an incorrect or missing adjusting entry would affect the financial statements (overstated/understated).

19. If given a set of information, be able to identify what type of adjusting entry would be applicable in that situation.

20. Be able to recognize, analyze, and record some basic adjusting entries necessary at the end of an accounting period, such as unrecorded receivables, depreciation, unearned revenue, etc.

21. Understand the difference between permanent and temporary accounts. Be able to prepare closing entries in the general journal in proper order & format. What accounts are included on the post-closing trial balance? Which accounts are not included? Why?

22. Understand and be able to identify elements of a multi-step Income Statement. Be able to calculate Net Sales, Goods Available for Sale, COGS, Gross Profit, and Net Income. How does a single step Income Statement differ from the multi-step Income Statement?

23. Know the terms and how to calculate purchases discounts and purchases returns & allowances.

24. Know the terms and how to calculate sales discounts and sales returns & allowances.   Be able to compute Net Sales.

25. Be able to journalize merchandise transactions including adjusting & closing entries. 

26. Understand shipping terms – who pays for shipping, who owns the goods?

27. Understand the concept of financial statement analysis and some examples of it, such as common ratios we have discussed – debt ratio, profit margin ratio, current ratio, etc.

28. Understand the concept of financial statement analysis and some examples of it, such as common ratios we have discussed – debt ratio, profit margin ratio, current ratio, etc.

29. Remember that for every journal entry, there must be an equal $ value of debits and credits. Even if you have to guess as to which account is affected – there will be no points awarded for one-sided journal entries. Also remember that debits are always listed first, credits are indented, and to skip a line a between entries.