Card Set Information

2014-11-07 14:43:41
Accounting dp
Show Answers:

  1. Direct Write Off Method
    • dr Bad Debt Expense
    •    cr Accounts Recievable

    It over states the value of Accounts Recievable
  2. Allowance Method
    • Record Sale                  
    • dr Accounts Recievable    
    •   cr Sales Rev.       

    • Estimate Of Bad Debts
    • dr bad debt expense
    •  cr Allowance for doubtful accounts

    • 1) Make end of period adjustment to record the estimated bad debits in the period credit sales occur.
    • 2) Remove " write off " specific customer balances when they are to be uncollectible
  3. Recovery of an account previously written off
    • dr Accounts Recievable
    •  cr Allowance for doubtful accounts
    • " Reverse of write off "
  4. Write Off- Uncollectible Acount
    • dr Allowance for doubtful accounts
    •  cr accounts recievable
  5. Allowance method for uncollectible accounts for Bad Debt Expense
    • dr Bad Debt expense
    •  cr Allowance for doubtful accounts
  6. Allowance
    It is a contra asset account.  It is used when bad debt expanse is recorded prior to knowing the specific accounts receivable that will be uncollectible
  7. Percentage of credit sales method- estimating bad debt
    Multiply the historical % of bad debt losses by the current periods credit sales
  8. Days in Inventory
    • 365
    • ___

    Inventory turnover
  9. Purchase Discounts
    • dr Accounts Payable
    •  cr cash
    •  cr inventory
  10. Purchase Returns and Allowances
    • dr Accounts Payable
    •  cr Inventory
  11. Lower Cost of Market Rule
    • dr COGS
    •  cr Inventory
  12. Perpetual inventory system journal entry if you are buying something
    • dr Inventoy
    •  cr Accounts Payable
  13. Transportation cost journal entry- company's
    • dr Inventory
    •  cr Cash
  14. FOB Shipping point
    Purchaser pays for the shipping
  15. FOB destination
    Seller pays for the shipping
  16. When Cost are rising, what does FIFO produce?
    Higher inventory value and a lower COGS
  17. When Cost are falling, what does FIFO produce?
    A lower ending inventory and a higher COGS
  18. When faced with increasing cost per unit, a company will have a higher income tax expense when it use, LIFO, or FIFO?
  19. Gross Profit
    Net Sales- COGS
  20. Gross Profit Percentage
    • Gross Profit
    • _________        times 100

    Net Sales
  21. B
    • Beginning Inventory
    • Add purchases
    • Subtract COGS
    • Ending Inventory
  22. Weighted ave. cost
    • Cost of good available for sales
    • __________________________

    Number of units available for sale

    Smoothes out price changes
  23. LIFO
    The goods that you purchased last are sold first

    • May 6th      $95}  top sold
    • May 5th      $75}
    • May 3rd      $70)  bottom still there, inventory on balance sheet

    Better matches current costs in COGS with rev.
  24. FIFO
    The goods that you purchased first are sold first

    • May 6th  $95) - Still there, inventory
    • May 5th  $75}
    • May 3rd  $70}- Both sold

    Ending inventory approximates current replacement costs
  25. Net Sales
    Sales rev.- Sales returns and allowances- Sales Discount
  26. Sale of Merchandise in a perpetual system journal entry
    • dr Accounts Recievable 
    •  cr Sales Rev.

    • dr COGS
    •  cr Inventory
  27. Sales Returns and Allowances journal entry
    • dr Sales returns and allowances
    •  cr Accounts Recievable

    • dr Inventory
    •  cr COGS
  28. Sales on account and Sales Discount
    • dr Accounts Recievable
    •  cr Sales Rev.

    • dr COGS
    •  cr Inventory
  29. Discount journal entry
    • dr Cash
    • dr Sales discounts
    •  cr Accounts recievable
  30. NSF check
    Reduction in the book balance
  31. EFT
    • dr Cash
    •  cr Accounts Recievable
  32. Interest Received from the bank journal entry
    • dr Cash
    •  cr Interest Revenue
  33. Customers check rejected as NSF
    • dr Accounts Recievable
    •  cr Cash
  34. Service Charges
    • dr Office Expense
    •  cr Cash
  35. Company Error
    • dr Accounts Payable
    •  cr Cash
  36. Debt to Asset
    The % of assets financed by debt.  The higher the ratio the greater financing risk.
  37. Asset Turnover
    How well assets are used to generate revenue. Higher ratio means greater efficiency.
  38. Net Profit Margin
    How much profit is earned by each dollar of revenue
  39. Additions bank side
    Deposits in transit
  40. Deductions bank side
    Outstanding checks
  41. Additions book side
    Interest, EFT
  42. Deduction book side
    NSF, company error, bank service charge
  43. When is ending inventory closest to the current cost?