Merchandise Inventory
What are the two different types of systems for keeping track of inventory?
What types of accounts are revenue, expenses, and withdrawals?
Temporary Accounts
Cash, Supplies, and Prepaid Insurance are which type of asset?
Current
What is the equation for gross profit?
net sales- COGS
What does FIFO stand for?
first in, first out
What do the terms 2/10, n/30 mean?
2% discount if they pay in ten days, full balance due in 30 days
Do closing entries come before or after the adjusted trial balance?
after
Where does Accumulated depreciation go on the balance sheet?
By equipment, or whatever it is the depreciation for, under plant assets
what is the equation for net income?
Gross Profit- operating expenses
What are the four columns used for FIFO, LIFO, and Weighted Average?
Dat, purchases, COGS, and ending inventory balance
What is the journal entry for shrinkage for the perpetual system?
Debit: COGS
Credit: Inventory
Which account do revenue and expenses close to?
Income Summary
What is an example of an intangible asset?
a patent
What is the equation for the current ratio?
Current Assets/ Current Liabilities
How do we get the Total COGS?
Add up the COGS from each sale.
What is FOB shipping point and FOB destination?
FOB shipping point: title transfers at the shipping point, buyer pays shipping costs
FOB destination: seller pays shipping cost, title is transferred at the destination
How do you close the Income Summary Account?
Find the balance from the revenue and expanses, then close to Capital.
True or False: The single step income statement includes Net Sales, COGS, and gross profit.
False: It only includes Net Sales.
What is the equation for the acid test ratio?
Quick Assets/ Current Liabilities
Take the total goods at each price, multiple across and add together to get the total price, then divide by the total amount of goods
What type of account is sales returns and allowances?
contra-revenue
How do you close the withdrawals account?
Debit: Capital
Credit: Withdrawals
Is insurance an Selling or General Expense?
General Expense
What is the equation for gross margin?
(net sales- COGS)/net sales
What is needed to do FIFO, LIFO and Weighted Avg for the periodic system?
Cost of goods available for sale, ending inventory, and COGS