Chapter 5
These are the four inventory methods.
1. FIFO
2. LIFO
3. Weighted Average
4. Specific Identification
This is the international organization developing and promoting accounting standards to be used throughout the world.
What is IASB?
When there are deposits in transit, they are ? from/to the bank balance.
Added
What are Plant Assets? Give one example.
Physical, tangible assets
ex: Truck, Land
This is the equation to compute inventory turnover.
Inventory Turnover = Cost of Goods Sold/ Average Inventory
This is the organization designated by the US government to establish Generally Accepted Accounting Principles in the United States.
What is FASB?
When there are outstanding checks, they are ? from/to the bank balance.
Subtracted
These are three examples of intangible assets.
Patents, copyrights, licenses, leaseholds, franchises, trademarks.
With the Ending Inventory Understated, these are the effects on Cost of Goods Sold and Net Income in the first year.
Cost of Goods Sold are Overstated
Net Income is Understated
These are the rules, principles, and concepts established by the accounting profession that govern financial accounting.
What is GAAP?
Service charges such as bank fees are ? from/to the book balance.
Subtracted
This is the equation for straight-line depreciation.
Purchase Value- Salvage Value/ Useful Life.
Inventory Balance is
10 @ $91
15 @$106
20 @$110
Using LIFO, this is the Inventory Balance be after selling 30 items.
Inventory Balance =
10 @ $91
5 @ $106
These people maintain and monitor financial records. They also must be able to correctly read and interpret what these financial records mean, and play an important role in preparing tax returns.
Who are CPAs?
Writing off a bad debt with the direct write-off method includes these journal entries.
Debit: Bad Debt Expense
Credit: accounts receivable
This is the process of allocating the cost of a natural resource to the period when it is consumed.
What is depletion?
Find the following:
Aug. 1, Beginning Balance: 10 @ $91 each = $910
Aug. 3, Goods Purchased: 15 @ $106 =$1590
1. What is Inventory Balance?
Aug. 14, Cost of Goods Sold: 20 units
2. What are COGS and Inventory Balance?
Aug.17, Goods Purchased: 20 @ $115 each = $2300
3. What is Inventory Balance?
Aug. 28, Goods Purchased: 10 @ $119 each = $1190
4. What is Inventory Balance?
Aug. 30, Cost of Goods Sold: 23 units
5. What are COGS and Inventory Balance?
1. 10 @ $91 each = $910
15 @ $106 =$1590
(25 @ $100 per unit)
2. 20 @ $100 = $2000
5 @ $100
Total: $500
3. 5 @ $100 = $500
20 @ $115 = $2300
(25 @ $112 per unit)
4. 5 @ $100 = $500
20 @ $115 = $2300
10 @ $119 = $1190
(35 @ $114 per unit)
5. 23 @ $114 = $2622
12 @ $114 per unit
A law passed in 2002 by the US Congress requiring a businesses management to accept responsibility for providing information needed by stakeholders outside the business.
What is the Sarbanes-Oxley Act(SOX)?
Recovering a bad debt with the allowance method includes these journal entries.
Debit: account receivables
Credit: allowance for uncollectible accounts
Debit: cash
Credit: accounts receivable
The three steps to depreciate an asset using the double-declining balance method.
1. Find straight-line rate.
2. Double the rate.
3. Multiply beginning-period book value by doubled rate.