3 Flashcards
cash
90 days or less
DIT
not recorded by bank but before cutoff
O/S
money going out that bank hasn’t received
service charge
deducted by the bank
sales returns
does not affect AR/Inv/COGS
direct write off
-not GAAP
-AR is overstated
Dr BDE
Cr AR
allowance method
% of sales (IS approach)
% of AR (BS approach)
Aging of AR (BS approach)
% of sales
Dr BDE
Cr AFDA
% of AR
use information to solve for ENDING BALANCE & then plug in to find the information
Aging of AR
schedule w # of days/mo outstanding x %
record w/o: Dr AFDA (dec) Cr AR (dec)
Adjustment:
Dr AFDA
Cr BDE
Factoring
w/o recourse (factor assumes risk)
w/ recourse (factor has option to resell)
Rising $
FIFO has high End Inv & NI. Low COGS
LIFO has low End Inv & NI. High COGS
Property
all costs incurred up to excavation
no depreciation
equipment
capitalize: additions, improvements/replacements, extraordinary repairs
expense: ordinary repairs
capitalize
direct materials/labor, repairs/maintenance that add value, overhead, construction interest