Exam 2

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philflrs
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24355
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Exam 2
Updated:
2010-06-21 01:02:04
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Review for exam 2
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  1. Two categories of expenses in merchandising
    companies are
    cost of goods sold and operating expeneses
  2. sales revenue less cost of goods sold is called
    gross profit
  3. after gross profit is calculated operating expenses are deducted to determine
    net income
  4. gross profit - what = net income
    operating expenses
  5. what - cost of goods sold - operating expenses = net income
    sales
  6. begining inv + cost of goods purchased - ending inv = what
    cost of goods sold
  7. inventory turn over = cost of goods sold / by what
    avg inventory
  8. cost of goods avail for sale - net sales = what
    ending inventory
  9. net sales - gross profit = what
    cost of goods sold
  10. cost of goods avail for sale - cost of goods sold = what
    ending inventory
  11. gross profit / net sales = what
    gross profit rate
  12. net sales = sales - what
    (SR&A + Sales discount)
  13. net income = gross profit - what
    operating expenses
  14. sales - sales discounts = what
    net sales
  15. purchases - purchase returns - purchase discounts + freight in = what
    cost of goods purchased
  16. begining inv + cost of goods purchased - ending invt = what
    cost of goods sold
  17. net sales - cost of goods sold = what
    gross profit
  18. gross profit - operating expenses = what
    net income
  19. ownership of the goods passes to the buyer when the public carrier accepts the goods from the seller
    FOB shipping point
  20. ownership of the goods remains with the seller untill the goods reach the buyer
    FOB desintiation
  21. if the seller pays the freight the goods are:
    ??????????
  22. if the buyer pays the freight the goods are:
    ?????????
  23. cost of goods avail for sale / total units avail for sale = what
    weighted avg unit cost
  24. understating begining inv will cause COGS to be what and net income to be what
    Under and over
  25. overstating begin inv will cause COGS to be what and net income to be what
    over and understated
  26. understate ending inv will cause COGS to be what and NI to be what
    Over and under
  27. overstating ending inv will cause COGS and NI to be what
    Under and over
  28. an overstated err in ending inv will cause assets to be WHAT and SE to be WHAT
    Overstated and Overstated
  29. Cost of goods sold / avg inventory = what
    inventory turnover
  30. states that only transaction data that can b expressed in terms of money be included in the accounting records
    monetary unit assumption
  31. states that the activities of the entity be kep separate and distinct from the activities of the owner and of all other economic entities
    Economic entity assumtpion
  32. states that the economic life of a business can be divided into artificial time periods
    time period assumption
  33. assumes that the company will contiune in operation long enough to caarry out is existing objectives
    going concern assumption
  34. dictates that companies should recoginize revenue in the accounting period in which it is earned
    revenue recognition principal
  35. dictates that companies match expenses with revenues in the period in which efforts are made to generate those revenues
    matching principal
  36. requires that companies disclose circumstances and events that make a
    difference to financial statement users
    full disclosure
  37. dictates that companies record assets at their cost
    cost principal
  38. relates to an items impact on a firms overall financial condition and operations
    materiality

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