Vocabulary
The amount a company can expect to receive for an asset at the end of the asset's useful life
Salvage Value
What accounts are debited and credited for the receipt of cash for the sale of gift cards?
Cash is debited and gift cards outstanding is credited
The amount borrowed on a loan is known as what?
Principal
Inventory turnover ratio is 5.4 - what does this mean
The business sold the average merchandise inventory 5.84 times during the current year.
The appraised value of land is $60,000 ad the appraised value of the building is $240,000. What is the assigned cost for each? The purchase price is $280,000.00
$60,000/$300,000 = Percentage of Appraised Value 20%
20% x $280,000 = assigned cost of $56,000
240,000/300,000 = 80%
80% x 280,000 = 224,000
The difference between an asset's account balance and its related contra account balance
Book Value
What two accounts are credited when cash is received for the monthly payment of an installment note receivable
Interest Income and Notes Receivable are credited.
Which amount does not change with each installment paid? The interest, the principal, or the monthly payment?
Monthly payment
Days sales in inventory is 63 days - what does this mean?
On average, each item in inventory is sold 63 days after it is purchased.
What is the difference between real property and personal property?
Real property is generally referred to as real estate or fixed property. Personal property is movable property - not stationary
Another name for a long-term asset, or a fixed asset
Plant Aset
What is the adjusting entry to recognize one month of rental use owed to the lessee.
Rent Income is debited and Unearned Rent is credited.
Calculate the following: The principal of a note is $3500, with an interest rate of 6% for 180 days. If you paid the loan in 70 days instead of 180 days, how much would you save in interest?
$63.29
3500x6%x180/365 = 130.56
3500x6%x70/365 = 40.27
Which method of inventory is best for perishable goods?
FIFO
What is the difference between temporary and permanent accounts
Permanent accounts are shown in a balance sheet and permanent accounts are shown in an income statement.
Permanent accounts include assets, liab., capital
Temporary accounts include expenses, sales, cost of goods, income summary
The rate at which the price of goods increases
Inflation
What accounts are debited and credited when customers redeemed gift cards for the sale of merchandise?
Gift Cards Outstanding is debited and Sales is credited.
What is the accrued interest income for a 180 day, $8,250 note at an interest rate of 8%? The note is dated November 30.
$8,250 x 8% x 31/365 = $56.05
Nov. 30-Dec. 31 = 31 Days
The Accounts Receivable Turnover Ratio is 8.3 - and the average book value of accounts is $27,695.05. What does this mean?
This means that the average book value of accounts receivable is collected 8.3 times a year.
If the average Book value is $27,695.05 then this is collected 8.3 times a year.
Is drawing a temporary or permanent account?
Temporary
The number of times the average amount of merchandise is sold during a specific time.
Inventory Turnover Ratio
What is the classification of gift cards outstanding?
Liability
What is the amount due on a 180 day, $5,000 note @ 6% interest?
$5,000 x 6% x 180/365 = $147.95
$5,000 + $147.95= $5,147.95
The Days' sales in accounts receivable is 44 days.
This means that is takes on average 44 days to collect the average amount of accounts receivable.
If the average amount of accounts receivable is $27,695.05, then this amount is collected on average 44 days.
Name the (5) different types of journals.
Cash payment
Cash Receipts
Sales
Purchases
General Journal