Adjusting Entries
Supplies used during the period require this type of adjusting entry.
What is a debit to Supplies Expense and a credit to Supplies?
These accounts appear on the balance sheet and are not closed at the end of the period.
What are permanent accounts?
The main difference between a merchandising company and a service company is that merchandisers do this.
What is sell inventory?
A credit term “2/10, n/30” means this.
What is a 2% discount if paid in 10 days; net due in 30 days?
Closing entries are made at this point in the accounting cycle.
What is the end of the accounting period?
An adjusting entry made to record earned but uncollected revenue is called this
What is an accrued revenue?
Temporary accounts are closed to this account at the end of the period
What is Retained Earnings (or Income Summary)?
The account used to record the cost of merchandise sold to customers
What is Cost of Goods Sold (COGS)?
What type of account is "Sales Discounts"?
What is a contra-revenue account?
The first accounts closed in the closing process.
What are revenue accounts
Adjustments for expenses paid before they are incurred are called this
What are prepaid (or deferred) expenses?
Assets are listed on the balance sheet in this order.
What is liquidity (how quickly they can be converted to cash)?
The difference between Net Sales and Cost of Goods Sold is called this
What is Gross Profit?
This contra-revenue account is used when customers return merchandise.
What is Sales Returns and Allowances?
Journal entry to close an expense account.
What is debit Income Summary, credit Expense?
What type of account is accumulated depreciation?
What is a contra-asset account?
What is the difference between a single-step and multi-step income statement?
What is the single-step shows revenues – expenses in one step; multi-step separates operating and non-operating items and shows subtotals like gross profit?
Freight costs incurred by the buyer are recorded in this account
What is Merchandise Inventory?
The entry to record a sales return under the perpetual system requires reducing both Sales Revenue and this account.
What is Inventory (or increasing Inventory by reversing COGS)?
In a perpetual system, purchases of merchandise are recorded as a debit to this account.
What is Inventory?
This principle requires companies to record expenses in the same period as the revenues they help generate.
What is the matching principle (expense recognition principle)?
What are the three main sections of a multi-step income statement?
What are gross profit, income from operations, and net income?
The formula for Net Sales.
What is Sales Revenue – Sales Discounts – Sales Returns & Allowances?
The account used to summarize temporary accounts before transferring to Retained Earnings
What is the Income Summary account?