Midterm Exam — Instructions

Overview

This is the scored midterm for Financial Accounting. It checks the first half of the course, Weeks 1 to 7. That means the accounting environment and its rule-setters, the equation that keeps the books in balance, debits, credits, and the trial balance, accrual accounting and adjusting entries, the statements and closing entries, merchandising, and inventory costing.

The midterm has 25 questions, and every question counts the same. Twenty-two of them ask you to pick one option, two ask you to pick every option that fits, and one asks you to judge whether a statement is true or false. Every amount, account balance, or business event a question uses is written out inside the question, so nothing depends on reading a chart or a picture.

Every question practices a skill you have already used in the weekly quizzes, lecture tutorials, and Accounting Workshops. You analyze a transaction, choose the accounts and the debit and the credit, compute an adjustment, a cost of goods sold, or a gross profit, place an item on the right statement, or read what a figure means. Businesses marked illustrative were written for the course and describe no real company. Nothing on the midterm comes from outside Weeks 1 to 7.

Coverage and scope

The midterm covers Weeks 1 to 7, which is Objectives 1 to 5 as taught in those weeks. Here is what the drawn form holds, objective by objective, with the weeks its questions come from:

• The accounting environment (Objective 1, 7 questions): 5 from Week 1, 1 from Week 2, and 1 from Week 3. Review Week 1 as a whole. Start with accounting as the system that measures, records, and reports a business's economic events, financial accounting against managerial accounting, and internal against external users. Then review the three forms a business can take, with the IRS's counts said in words; the rule that keeps a business's records apart from its owners' records; and GAAP and who sets it, the FASB (established in 1973) and the SEC (created in 1934). Finish with IFRS, compared with GAAP without ranking; the AICPA's six principles; and the four financial statements. Weeks 2 and 3 called Week 1 back, with the corporation standing apart from its shareholders and with the outside readers who rely on complete records.
• Recording transactions (Objective 2, 6 questions): 5 from Week 2 and 1 from Week 3. Review the whole of Week 2: assets, liabilities, and stockholders' equity; the equation Assets = Liabilities + Stockholders' Equity; Common Stock and retained earnings; revenues, expenses, and dividends as the drivers of retained earnings; and transaction analysis with the equation kept in balance. From Week 3, review debits and credits as sides, normal balances, contra accounts, the journal and the ledger, the trial balance, and what a balanced trial balance does not prove.
• Accrual accounting (Objective 3, 3 questions): 2 from Week 4 and 1 from Week 5. Review the cash basis against the accrual basis, which GAAP requires, and the five steps of revenue recognition set by the FASB's 2014 update on revenue. Then review expense recognition, deferrals and accruals, depreciation and Accumulated Depreciation, the rule that an accrual or deferral adjusting entry never touches Cash, a trial balance taken after adjusting, and the qualitative characteristics. Week 5 called that adjusted trial balance back as the source of every statement figure.
• Completing the cycle (Objective 4, 3 questions): 2 from Week 5 and 1 from Week 6. Review the three statements in their order, the classified balance sheet and what current means, temporary against permanent accounts, the four closing entries through Income Summary, the trial balance taken after closing, and the steps of the accounting cycle. Week 6 called the income statement back in its multi-step form.
• Merchandising and inventory (Objective 5, 6 questions): 3 from Week 6 and 3 from Week 7. From Week 6, review perpetual and periodic systems, credit terms of 2⁄10, n⁄30 and purchase discounts, freight under each of the two FOB terms, a sale's two entries, and gross profit and gross margin. From Week 7, review specific identification, FIFO, LIFO, and weighted average and their effects when costs rise, without ranking them. Then review consistency, the fact that IFRS does not allow LIFO, the lower of cost and net realizable value, and inventory errors in words.

By week, the 25 questions come out like this:

Week 2 carries the most questions, 6, so the equation and transaction analysis deserve the most review time. Week 1 comes next with 5, then Week 6 with 4. Weeks 5 and 7 have 3 each, and Weeks 3 and 4 have 2 each. By objective, the accounting environment carries the largest share, 7 questions, and recording transactions and merchandising and inventory come next with 6 each.

By difficulty, 8 questions are easy, 11 are medium, and 6 are hard. The medium and hard ones usually ask you to compute a figure from a fresh illustrative business or to spot a common wrong turn, the way the misconception checks in each chapter did.

Week 8's new material on internal control is not tested on the midterm. It returns in Week 9, and it shows you why the records behind every figure on the midterm need protecting.

These notes map the skills the midterm checks. The questions themselves are drawn from the course's question bank and are not listed here.

Instructions

• Attempts: one. The midterm is a single scored attempt.
• Time limit: there is no time limit. Take the time you need, as long as you submit before the exam closes.
• Window: the midterm opens in the Week 8 module and closes at the due time your instructor sets. Start early enough to finish comfortably inside that window.
• Navigation: the questions appear one at a time, and once you move on you cannot go back to an earlier question. Settle each one before you move to the next.
• Materials: every amount and event a question uses is printed in the question. Some questions ask you to add, subtract, multiply, or divide those amounts. The syllabus sets no rule on notes or on a calculator, so your instructor will tell you before the midterm opens what you may have beside you.
• After you submit: Canvas shows your result. The keyed choices stay hidden so the midterm stays fair for every student.

Academic integrity

The midterm is an individual, scored assessment, and it is closed to AI. Do not use a chatbot or any other AI tool, do not get help from another person, and do not share or post the questions during or after your attempt. The syllabus closes the midterm to AI and requires it to be entirely your own work. The midterm confirms that you personally can analyze a transaction, choose the accounts and the debit and the credit, compute an adjustment or a cost of goods sold, and read a financial statement.

The honest way to prepare is open to you. The study guide, the practice exam, and the exam-prep tutorial rehearse the same skills with fresh variants, and nothing on them appears on the midterm word for word.

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