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ACCT 212 Week 4 Midterm (Set 2)
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ACCT 212 Week 4 Midterm (Set 2)

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1. (TCO 1) Suppose your company sold $50,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? 2. (TCO 2) Suppose your company paid $12,000 in cash for a used car. How does this transaction impact the accounting equation? 3. (TCO 3) Pressure is one of the components of the fraud triangle. What types of pressures do people face that could lead to fraud? Give an example of how pressure could lead to fraud 4. (TCO 4) How does vertical analysis of financial statements differ from horizontal analysis? Which method do you think is a better analysis tool? 1. (TCO 3) Physical control is a key feature in an internal control system. Why is physical control such an important internal control? Give an example of physical control as an internal control. 2. (TCO 1) Describe the income statement. Why is this statement important to the company, creditors, and investors? 3. (TCO 4) Name and describe one liquidity ratio. What does this ratio measure? What is the formula for this ratio?

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