Chapter 1 1. What are the differences between managerial accounting and financial accounting? 2. What are the GAAP principles? What do they mean? 3. What are the differences between cash and accrual accounting? 4. Benefits of accrual accounting 5. What is depreciation? How does depreciation affect book value? 6. Calculation and comparison of depreciation methods a. Straight-line b. MARCS 7. Should we depreciate an idle property? Chapter 2 1. What are the structure and organization (e.g. account names, order of accounts, categories) of a typical income statement and balance sheet? 2. Definition of accounts 3. What is the accounting equation? 4. What are the differences between a balance sheet and an income statement? 5. What are the main connections between an income statement and a balance sheet? 6. Is Cost of Sales one of the operating expenses? 7. What are the limitations of balance sheets? 8. What are the differences between the three forms of ownership? 9. What are the purposes of inventory control? 10. What are the differences between the two inventory control methods: periodic and perpetual? 11. How to find the cost of goods sold with the value of ending inventory? 12. Be able to find the value of ending inventory and cost of goods sold based on the following three methods. 13. FIFO 14. LIFO 15. Weighted average 16. What are the three adjustments for finding the net food cost? 17. How do FIFO and LIFO influence cost of sales during inflation periods? Chapter 3 1. What are the goals of investors, creditors, and managers? Why do investors and creditors have conflicts of interest? 2. What are the objectives of comparative and common-size analysis? 3. Be able to perform comparative and common-size analysis for balance sheets and income statements. 4. Be able to interpret analysis results 5. Average check vs. revenue. Does high revenue always lead to high average check? Observe the example on slide 16 to see the answer. 6. Be able to calculate trend percentage and trend index.

7. What is the difference between trend percentage and trend index? 8. How does trend index fix inflations effect on manager performance? Use trend index to convert historical dollar into current dollar. 9. What indices can be used as a proxy of inflation? 10. Be able to convert historical dollar into current dollar using trend index. Chapter 4 1. What are the benefits of ratio analysis? 2. What can each of the five ratio categories tell us? What are the differences between them? a. What is the difference between liquidity and solvency ratios? b. What is the difference between activity and profitability ratios? 3. Be able to calculate and interpret all ratios. a. What do the numbers mean? b. Ask yourself if the increase of a certain ratio is good or bad. 4. What are the differences between current ratio and quick ratio? 5. What are shareholders and creditors preference for the level of liquidity and solvency ratios? 6. What is working capital? What is the relationship between working capital and current ratio? 7. What are the two implications of negative working capital? 8. What are the ways to improve current ratio? 9. What is window dressing? 10. When a ratio is based on a balance sheet account and an income statement account, why do we need to find the average of the balance sheet account before using it to calculate the ratio? 11. What is the difference between ROA and ROE? 12. What is financial leverage? 13. What are hotel and restaurant operating ratios? 14. What is the relationship between ADR, occupancy, and RevPAR?