ACC101 (Ch 5 & 6) Flashcards
Cost of goods sold is a(n) ______ account an has a normal _______ (dr/cr) balance.
expense; dr
Cost of good sold is reported on the _______ (financial statement.)
Income Statement
FOB shipping point means that the _______ (buyer/seller) pays shipping and records shipping to the _______ account.
buyer; inventory
FOB destination means that the _______ (buyer/seller) pays shipping and records shipping to the _______ account.
seller; freight-out (expense) or delivery expense
A sales return is recorded by the seller in the ________ account which has a normal ________ (dr/cr) balance.
sales returns & allowances; debit (it is a contra-revenue account.)
A sales discount is recorded by the seller in the ________ account which has a normal ________ (dr/cr) balance.
sales discount; debit (it is a contra-revenue account.)
A return is recorded by the buyer in the ________ account which has a normal ________ (dr/cr) balance.
inventory; debit
A discount is recorded by the buyer in the ________ account which has a normal ________ (dr/cr) balance.
inventory; debit
A purchase of inventory on account is recorded with a debit to ______ and a credit to ______.
DR Inventory
CR Accounts payable
A return of inventory (purchased on account) is recorded with a debit to ______ and a credit to ______.
DR Accounts payable
CR Inventory
Payment of freight costs by the buyer is recorded with a debit to ______ and a credit to ______.
DR Inventory
CR Cash
To record payment (of inventory) on account within the discount period, debit the ______ account(s) and credit the ______ account(s).
DR A/P (purchase - return)
CR Inventory (discount)
CR Cash (A/P bal - discount)
A sale of inventory on account is recorded with a debit to ______ account(s) and a credit to ______ account(s).
DR A/R
CR Sales Revenue
DR COGS
CR Inventory
Accepting a return of inventory (sold on account) is recorded with a debit to ______ account(s) and a credit to ______ account(s).
DR Sales Returns & Allowances
CR A/R
DR Inventory
CR COGS
Payment of freight costs by the seller is recorded with a debit to ______ and a credit to ______.
DR Freight out (or delivery exp)
CR Cash
When the seller records receipt/collection of payment (of inventory) on account within the discount period, debit the ______ account(s) and credit the ______ account(s).
DR Cash (A/R bal - discount)
DR Sales Discount (discount)
CR A/R (sale - return)
How do you calculate gross profit?
Sales revenue (less Sales R&A and Sales Discounts)
- COGS
What is the basic format of the multiple step income statement?
Sales
- COGS
= Gross Profit
- Operating Expenses
= Net income (loss)
How do you calculate net sales?
Sales Revenue
- Sales Returns & Allowances
- Sales Discounts
= Net Sales
How much discount does the terms 3/10, n/30 offer?
3%
How many days does the terms 3/10, n/30 allow a discount?
10 days
What is the JE for closing revenues for a merchandising company?
DR Sales Revenue
CR Income Summary
What is the JE for closing expenses for a merchandising company?
DR Income Summary
CR COGS
CR Sales Returns & Allow.
CR Sales Discounts
CR Freight Out(delivery exp)
CR all other exp accounts
What is the JE for closing income summary with a profit for a merchandising company?
DR Income Summary
CR Retained Earnings
Note> retained earnings is increased by net income
