217 knoledge midterm check

Question 1

theory: Owed to company by customers (CA)

Answer 1

Account receivable

Question 2

Theory: Amount company owes for goods received but not paid for (CL)

Answer 2

Account payable

Question 3

Theory: Promise to pay a loan (NCL)

Answer 3

Note Payable

Question 4

Theory: Equity generated in exchange for stocks (SE)

Answer 4

Contributed Capital

Question 5

Theory: Prepayment by customer who have yet received good (CL)

Answer 5

Deferred Revenue

Question 6

Describe all the steps for a statement of earnings

Answer 6

Sales revenue
less: sales discount
Net Sales
Less: cost of goods
Gross Profit
Rent Revenue

Operating expenses
wage expense
utilities expense
depreciation expense
total operating expense
total earnings from operations -> gross profit + rent - total opperating

Non Operating expense
interest
earnings before income tax
net earnings

Question 7

Formula: Value of Accounts receivable

Answer 7

NetAccountsReceivable=GrossAccountsReceivable−AllowanceforDoubtfulAccounts

Question 8

Formula: Cash collected

Answer 8

Net revenue - Increase in Net accounts receivable

Question 9

Formula: Account receivable turnover ratio (2 steps)

Answer 9

Step 1. Calculate Average Accounts Receivable
Step 2. Net revenue (2023) / step 1

Question 10

Formula: Gross Profit Percent

Answer 10

Gross profit/net revenue

Question 11

Formula: Net Profit Margin

Answer 11

Net earnings/Net Sales