Principles
A company should report the least favorable figures in the financial statements when two or more options are presented.
Conservatism
Even in a perpetual inventory system a business must do this at least 1 time a year.
Take a physical count of inventory
What is the name of the galaxy in which we live?
The Milky Way
If the credit term is expressed as "3/15, n/30", what does that mean?
3% off if paid within 15 days.
Net paid within 30 days
Formula for Inventory Turnover
COGS/Average Merch Inventory
A company should report enough info for outsiders to make knowledgeable decisions about the company
Disclosure Principle
Which inventory systems requires businesses to obtain a physical count of inventory to determine the quantities on hand?
Periodic Inventory System
This is a financial examination of a company's financial records.
Audit
What are the two new accounts used for sales returns and allowances?
Estimated Returns Inventory
Refunds Payable
What is the debt ratio?
total liabilities/total assets
A company must perform strictly proper accounting only for significant items.
Materiality Concept
This term is the loss of inventory that occurs because of theft or damage
Inventory Shrinkage
GAAP stands for this
Generally accepted accounting principles
How is long is an Olympic swimming pool? (In Meters)
50 meters
What countries made up the Axis Power during WWII?
Germany, Italy, and Japan
A company should use the same accounting methods and procedures from period to period.
Consistency Principle
In order name the accounts that we zero out when closing
1. Revenue accounts
2. Expense accounts
3. Income Summary
4. Dividends
This is a measure of how quickly an item can be converted into cash.
Liquidity
What is "cynophobia"?
Fear of Dogs
Formula for Days' Sales in Inventory
365/Inventory Turnover
Which of Dr. Seuss' books did he write as a part of a bet?
Green eggs & ham
If a business has an unadjusted inventory balance of $31,530. However, after a physical count they realize they only have $30,00 on hand. What is the adjusting entry for this inventory shortage?
COGS 1,530
Merch Inv. 1,530
This organization has the primary responsibility for formulating accounting standards.
FASB or Financial Accounting Standards Board
This term means the buyer takes ownership of the good when the goods leave the seller's place of business.
FOB Shipping Point
What is the gross profit percentage formula?
Gross Profit Percentage= Gross Profit/ Net Rales Revenue