AAMI Accounting 1 & 2 (ACCT101 & ACCT102) – 230 Exam Questions and Answers on Accounting Equation, Inventory, Depreciation, Journal Entries & Financial Ratios

This document provides a comprehensive compilation of approximately 230 exam questions and verified answers covering the full scope of AAMI Accounting 1 and AAMI Accounting 2 (ACCT101 & ACCT102) for the 2026 academic year. The material is designed to help students review both introductory and intermediate financial accounting concepts through a structured question-and-answer format. Major foundational topics include the accounting equation, debit and credit rules, asset and liability classification, owner’s equity accounts, revenue and expense recognition, journal entries, and the preparation of key financial statements such as the Income Statement, Statement of Owner’s Equity, and Balance Sheet. The document also expands into more advanced accounting topics typically introduced in a second accounting course. These include inventory valuation methods (FIFO, LIFO, Weighted Average, and Specific Identification), cost of goods sold calculations, merchandising transactions, purchase discounts, sales returns and allowances, freight-in costs, and sales tax accounting. Students are also introduced to payroll accounting concepts such as gross pay, net pay, payroll deductions, FICA taxes, W-2 and W-4 forms, and payroll tax reporting. In addition, the material explains asset cost allocation methods including depreciation, depletion, and amortization, along with depreciation techniques such as Straight-Line, Units of Output, Sum-of-the-Years’ Digits, and Double Declining Balance. Financial analysis concepts are also included to help students interpret financial information and evaluate business performance. These topics include liquidity analysis, working capital calculations, current ratio and acid-test ratio (quick ratio), inventory turnover, accounts receivable turnover, and average collection period. The document further touches on related business and economic concepts such as inflation, globalization, macroeconomics, microeconomics, GDP, and financial regulation topics like the Sarbanes-Oxley Act. Together, these questions cover the full accounting cycle from recording transactions to analyzing financial performance. The structure of the document makes it especially effective for exam preparation, revision sessions, and self-testing. Each concept is presented as a direct question followed by a clear answer, allowing students to quickly reinforce definitions, formulas, and accounting procedures. Because it integrates material from both Accounting 1 and Accounting 2, it can also be used as a comprehensive semester review or final exam study guide. The topics align closely with foundational chapters in widely used introductory accounting textbooks such as Financial Accounting by Jerry J. Weygandt, Paul D. Kimmel, and Donald E. Kieso, which are commonly used in undergraduate business and accounting programs. Students using similar textbooks or course materials will find the questions strongly aligned with standard accounting curricula. This study material may be relevant for students enrolled in courses such as: Accounting 1 Accounting 2 Principles of Accounting I and II Introduction to Financial Accounting Financial Accounting Fundamentals Merchandising and Inventory Accounting Accounting for Business Students It may also be useful for students pursuing programs including: Accounting Business Administration Finance Economics Entrepreneurship Management Business Studies Keywords: accounting equation, debit and credit rules, journal entries accounting, trial balance accounting, financial statements preparation, inventory valuation methods, fifo lifo weighted average specific identification, cost of goods sold accounting, merchandising transactions accounting, sales returns and allowances accounting, payroll accounting fundamentals, fica payroll taxes accounting, depreciation methods accounting, straight line depreciation, double declining balance depreciation, working capital analysis, liquidity ratios accounting, current ratio quick ratio acid test ratio, inventory turnover ratio, accounts receivable turnover, financial accounting exam questions