The flashcards below were created by user
Gibbymn
on FreezingBlue Flashcards.
-
Merchandising co. Operating cycle
- 1. Purchase murchandise
- 2. Sale of merch on account
- 3. Collect cash for AR
-
Retailers
Sell merch directly to the public.
-
Wholesalers
They buy merch from manufacturers and sell to retailers.
-
Income statement of a merchandising company
Revenue-COGS-expenses= net income
-
Gross profit = ?
= sales - COGS
Or Net sales - COGS
-
COGS is ?
An expense of goods sold to customers.
-
Gross profit % =
Or
Gross profit % margin=
= gross profit / revenue
= gross profit / net sales
-
Subsidiary ledgers show ?
Details about individual items in the general ledger.
-
In a Perpetual inventory system ?
The inventory account is continuously updated to show items on hand.
-
Journal entry for inventory shrinkage
- Dr. COGS. XXX
- Cr. Inventory. XXX
This reduces the inventory on record.
-
2/10, n/30 means ?
2% discount if paid in 10 days, otherwise the full amount is due in 30 days.
-
Purchases on the gross method are recorded at ?
AP always at 100%
-
Journal entry within discount, on gross method
- Dr. AP
- Cr. Cash
- Cr. Purchase discount taken
-
Purchases under the net method are recorded ?
AP is always recorded at Net% of invoice. (the $ paid, discount or not)
-
Journal entry w/ disscount on Net method
- Dr. AP. ($ paid)
- Cr. Cash. ($ paid)
-
Purchase w/out discount under net method
- Dr. AP
- Dr. Purchase discount lost
- Cr. Cash
-
"Sales returns and allowances" & "sales discounts" are what accounts ?
- Contra-revenue accounts
- (norm balance-- debit)
-
Sales need how many entries?
TWO!!, one to record sales and one to record COGS
- Dr. AR. XXX
- Cr. Sales. XXX
- Dr. COGS. XXX
- Cr. Inventory. XXX
-
Sales discount need how many journal entries?
ONE
- Dr. Cash. XX
- Dr. Sales discount XX
- Cr. AR. XX
-
Sales returns need how many journal entries?
TWO
- Dr. Sales return & allow
- Cr. AR
-
Transportation cost needs how many journal entries?
ONE
- Dr. Delivery expense
- Cr. Cash
-
COGS = ?
(using inventory)
- = beginning inventory
- + purchases
- - ending inventory
|
|