COS
cost of goods sold
Ella has inventory which cost $14,000. The items are proving difficult to sell, so she plans to modify them and repackage at a cost of $1,500. She then expects to be able to sell them for $ 16,000.
What is the valuation of this inventory to be included in the financial statement of Ella?
14,000
materiality
the BOOK OF PRIME ENTRY from which postings are made about purchase, sales and depreciation of NCA ?
Journal
what is the purpose of trial balance?
To test the accuracy of the double entry bookkeeping
Formula for calculating COGS
COGS=opening inventory+ net purchase-closing inventory
Using the FIFO method will produce a higher year- end inventory value than the average cost method.
TRUE OR FALSE?
True
Depreciation is a cash expense. True or False?
False. its an allocation of costs over a period
sale price of the asset- carrying amount of the asset at the time of sale=?
profit/loss made when disposing the non-current asset
name FOUR errors that will not be revealed by extraction of trial balance.
- complete ommission
- error of commision
- error of pricinple
- error of original entry
Distinguish between carriage outwards and carriage inwards
- carriage inwards is cost of delivering goods purchased
- carriage outwards is cost of delivering goods sold to customers
Which TWO of the following statements about inventory valuation are correct?
1)The weighted average cost or FIFO method can be used to determine cost.
2)Closing inventory is valued at the lower of cost and net realisable value (NRV).
3)Closing inventory is always valued at historical cost.
4)Net realisable value is the selling price plus the costs to sell.
1,2
A company purchases equipment for $30,000 on July 1, 2017. It is estimates that the equipment will have a residual value of $2,000 and useful life of 7 years. Assuming that the company's accounting year ends on December 31 of each year, what will be the depreciation expense for the years 2017, 2018 in straight line method?
year 2017: 2000
year 2018: 4000
The NCA register is part of double entry system. True or false?
false. it is separate from double entry system
In a period, sales are $140,000, purchases $75,000 and other expenses $25,000. What is the figure for net profit to be transferred to the capital account?
$40,000
The cost of carriage outwards is .............. and ................ expense in the SOPL. Therefore the cost is deducted from .......... ........... to calculate net profit.
1. selling
2. distribution
3. gross profit
On 1 September, Miu has 100 units of inventory that cost $12 each.
Date | Units | $ | |
3 September | Sale | 60 | |
4 September | Purchase | 50 | 11.50 |
12 September | Purchase | 80 | 12.50 |
18 September | Sale | 80 |
What is the value of Miu's inventory at 30 September using the weight average
method?
1088
IF a company revises the estimated useful life of one of its assets being depreciated, the company will need to reissue its earlier financial statement as the earlier depreciation was incorrect
False
Define part exchange of NCA in your own words.
- NCA sometimes exchanged for replacements as part of the same deal.
- new asset is exchanged for existing asset. the remaining balance is paid in cash
Interest expense of $1,000.
On 1 January 20X6, Freddie's store had goods in inventory valued at $10,000. During 20X6 the owner purchased supplies costing $70,000. Sales revenue for the year amounted to $120,000. The cost of goods in inventory at the end of the year was $22,000. Calculate the gross profit?
Gross profit= $62,500
Financial year ends on 31 December. At 1 January 20X6 she had goods in inventroy valued at $21,500. During the year to 31 December 20X6, she purchased goods costing $73,000. Fashion goods which cost $4,300 were still held in inventroy at 31 December 20X6, and Sarah believes these could only be sold at a sale price of $800. The goods still held in inventory at 31 December 20X6 (including the Fashion goods) had an original purchase cost of $18,700. Sales for the year were $132,500.
Calculate the gross profit for the year ended 31 December 20X6
53200
On january 1,2013 an asset was acquired for $30,000. Its useful life was expected to be 10 years and the residual value is expected to be $0. after 4 years of use, the company realized the asset would be useful for only three more years ( meaning the useful life is 7 years instead of 10). The company uses straight line method of depreciationl. The depreciation expense in each of the years 2017.2018. 2019 will be $?
6000
the ledger accounting entries for disposal of NCA
DEBIT disposal of nca account
Credit nca account
DEBIT accum. depreciation account
CREDIT disposal of nca account
DEBIT receivables account/ bank account
CREDIT disposal of NCA account
statement of financial position.