Change fund/ Petty Cash
This small amount of cash kept on hand is used to pay for minor business expenses like office supplies or postage.
What is petty cash?
This inventory method assumes the oldest items purchased are sold first.
What is FIFO (First-In, First-Out)?
This method of depreciation spreads the cost of an asset evenly over its useful life.
What is the straight-line method?
This method records bad debt expense only when a specific customer's account is determined to be uncollectible.
What is the direct write-off method?
This financial statement reports a company's revenues and expenses for a specific period of time.
What is the income statement?
This type of fund is maintained at a constant balance and is used to make change for customers in a retail environment.
What is a change fund?
This inventory method calculates the cost of goods sold using the average cost of all units available for sale.
What is the Weighted Average method?
In the straight-line method, this value is subtracted from the asset’s cost before calculating annual depreciation.
What is salvage value (or residual value)?
Disposal
This contra-asset account is used under the allowance method to reduce Accounts Receivable to its net realizable value.
What is Allowance for Uncollectible Accounts?
When a company pays cash for Merchandise what account is debited?
Purchases
When a company replenishes petty cash they debit.....
Whatever expenses that reduced the petty cash.
This method tracks the exact cost of each individual item sold, often used for expensive or unique products like cars or jewelry.
What is Specific Identification?
This depreciation method results in higher depreciation expense in the early years of an asset’s life and lower expense in later years.
What is the declining-balance method?
When using the direct write-off method, this account is debited when a customer's account is written off as uncollectible.
What is Uncollectible Accounts Expense
This adjusting entry is required when a company has used some of its prepaid insurance during the accounting period.
What is debiting Insurance Expense and crediting Prepaid Insurance?
If a change fund is over at the end of the day, this account is typically used to record the difference between the expected and actual cash.
What is Cash Short and Over?
During periods of rising prices, this inventory method typically results in the lowest net income because it assigns the newest, higher costs to cost of goods sold.
What is LIFO?
This is the double declining rate for an asset that lasts 10 years
What is .2
2 ÷ 10 years
Under the allowance method, this account is credited when estimating bad debts at the end of the period.
What is Allowance for Uncollectible Accounts?
If total assets are $95,000 and total liabilities are $60,000, this is the amount of owner's equity.
What is $35,000?
If a petty cash fund is established for $200 and contains $45 in cash and $150 in receipts, this specific accounting issue exists. (debit or credit what account and how much)
DR. Cash short over $5
During April 90 units were sold:
Beginning 25 units purchased $4.60
April 2nd 10 Units purchased $5.50
April 9th 30 Units purchased $5.25
April 16th -20 Units purchased $5.25
April 23rd - 35 Units purchased $5.50
April 30th - 20 units purchased $5.50
Total units purchased 140
This is the $ amount of the ending inventory on using the FIFO inventory costing method
$275
April 30th 20 units $5.50 =$110
April 23rd 30 units $5.50 = $165
If equipment costs $50,000, has a salvage value of $5,000, and a useful life of 9 years, this is the annual depreciation expense using the straight-line method.
What is $5,000?
(Calculation: ($50,000 − $5,000) ÷ 9 = $5,000)
A company estimates that 3% of $80,000 in credit sales will be uncollectible. This is the amount of bad debt expense recorded using the percentage-of-sales method.
What is $2,400?
(Calculation: 0.03 × 80,000 = 2,400)
This document lists all accounts and their balances to test whether total debits equal total credits.
What is a trial balance?