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ACC101 > ACC101 (Ch 5 & 6) > Flashcards

ACC101 (Ch 5 & 6) Flashcards

1
Q

Cost of goods sold is a(n) ______ account an has a normal _______ (dr/cr) balance.

A

expense; dr

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2
Q

Cost of good sold is reported on the _______ (financial statement.)

A

Income Statement

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3
Q

FOB shipping point means that the _______ (buyer/seller) pays shipping and records shipping to the _______ account.

A

buyer; inventory

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4
Q

FOB destination means that the _______ (buyer/seller) pays shipping and records shipping to the _______ account.

A

seller; freight-out (expense) or delivery expense

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5
Q

A sales return is recorded by the seller in the ________ account which has a normal ________ (dr/cr) balance.

A

sales returns & allowances; debit (it is a contra-revenue account.)

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6
Q

A sales discount is recorded by the seller in the ________ account which has a normal ________ (dr/cr) balance.

A

sales discount; debit (it is a contra-revenue account.)

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7
Q

A return is recorded by the buyer in the ________ account which has a normal ________ (dr/cr) balance.

A

inventory; debit

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8
Q

A discount is recorded by the buyer in the ________ account which has a normal ________ (dr/cr) balance.

A

inventory; debit

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9
Q

A purchase of inventory on account is recorded with a debit to ______ and a credit to ______.

A

DR Inventory
CR Accounts payable

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10
Q

A return of inventory (purchased on account) is recorded with a debit to ______ and a credit to ______.

A

DR Accounts payable
CR Inventory

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11
Q

Payment of freight costs by the buyer is recorded with a debit to ______ and a credit to ______.

A

DR Inventory
CR Cash

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12
Q

To record payment (of inventory) on account within the discount period, debit the ______ account(s) and credit the ______ account(s).

A

DR A/P (purchase - return)
CR Inventory (discount)
CR Cash (A/P bal - discount)

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13
Q

A sale of inventory on account is recorded with a debit to ______ account(s) and a credit to ______ account(s).

A

DR A/R
CR Sales Revenue
DR COGS
CR Inventory

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14
Q

Accepting a return of inventory (sold on account) is recorded with a debit to ______ account(s) and a credit to ______ account(s).

A

DR Sales Returns & Allowances
CR A/R
DR Inventory
CR COGS

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15
Q

Payment of freight costs by the seller is recorded with a debit to ______ and a credit to ______.

A

DR Freight out (or delivery exp)
CR Cash

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16
Q

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).

A

DR Cash (A/R bal - discount)
DR Sales Discount (discount)
CR A/R (sale - return)

17
Q

How do you calculate gross profit?

A

Sales revenue (less Sales R&A and Sales Discounts)
- COGS

18
Q

What is the basic format of the multiple step income statement?

A

Sales
- COGS
= Gross Profit
- Operating Expenses
= Net income (loss)

19
Q

How do you calculate net sales?

A

Sales Revenue
- Sales Returns & Allowances
- Sales Discounts
= Net Sales

20
Q

How much discount does the terms 3/10, n/30 offer?

A

3%

21
Q

How many days does the terms 3/10, n/30 allow a discount?

A

10 days

22
Q

What is the JE for closing revenues for a merchandising company?

A

DR Sales Revenue
CR Income Summary

23
Q

What is the JE for closing expenses for a merchandising company?

A

DR Income Summary
CR COGS
CR Sales Returns & Allow.
CR Sales Discounts
CR Freight Out(delivery exp)
CR all other exp accounts

24
Q

What is the JE for closing income summary with a profit for a merchandising company?

A

DR Income Summary
CR Retained Earnings

Note> retained earnings is increased by net income

25
Q

What is the JE for closing income summary with a loss for a merchandising company?

A

DR Retained Earnings
CR Income Summary

Note> retained earnings is decreased by net loss

26
Q

What is the JE for closing dividends for a merchandising company?

A

DR Retained Earnings
CR Dividends

Note> retained earnings is decreased dividends

27
Q

Inventory is a(n) ________ account and has a normal _____ (dr/cr) balance.

A

asset; debit

28
Q

3/1 inv is 5 units at $1,
3/10 Purch. 10 units at $2
3/15 Purch. 8 units at $3
Ending inventory is 6 units.

How many units were sold?

A

17 (5+10+8=23-6)

29
Q

3/1 inv is 5 units at $1,
3/10 Purch. 10 units at $2
3/15 Purch. 8 units at $3
Ending inventory is 6 units.

Using FIFO, what is COGS?

A

5 x $1 = $5
10 x $2 = $20
2 x $3 = 6
Total = $31

30
Q

3/1 inv is 5 units at $1,
3/10 Purch. 10 units at $2
3/15 Purch. 8 units at $3
Ending inventory is 6 units.

Using FIFO, what is ending inventory?

A

6 x $3 = $18

31
Q

3/1 inv is 5 units at $1,
3/10 Purch. 10 units at $2
3/15 Purch. 8 units at $3
Ending inventory is 6 units.

Using LIFO, what is COGS?

A

8 x $3 = $24
9 x $2 = $18
Total = $42

32
Q

3/1 inv is 5 units at $1,
3/10 Purch. 10 units at $2
3/15 Purch. 8 units at $3

Ending inventory is 6 units.
Using LIFO, what is Ending Inventory?

A

5 x $1 = $5
1 x $2 = $2
Total = $7

33
Q

3/1 inv is 5 units at $1,
3/10 Purch. 10 units at $2
3/15 Purch. 8 units at $3
Ending inventory is 6 units.

Using average-cost, what is the average cost of each unit (round to 3 digits)?

A

$49 / 23 = 2.130

34
Q

3/1 inv is 5 units at $1,
3/10 Purch. 10 units at $2
3/15 Purch. 8 units at $3
Ending inventory is 6 units.

Using average-cost, what is the cost of ending inventory (round to 3 digits)?

A

$49 / 23 = 2.130

6 units (EI) x 2.130 = $12.78

35
Q

3/1 inv is 5 units at $1,
3/10 Purch. 10 units at $2
3/15 Purch. 8 units at $3
Ending inventory is 6 units.

Using average-cost, what is cost of goods sold (round to 3 digits)?

A

$49 / 23 = 2.130
17 units sold x 2.130 = $36.21

36
Q

What is the formula for inventory (cost of goods sold)?

A

Beginning Inventory
+ Purchases
= Goods available for sale
- Ending Inventory
= Cost of goods sold

37
Q

A company has 20 widgets in inventory that cost $5 and now have a net realizable value of $4. How much should the inventory be reported at?

A

$4 (lower amount) x 20 = $80 total

38
Q

A company has 20 widgets in inventory that cost $5 and now have a net realizable value of $6. How much should the inventory be reported at?

A

$5 (lower amount) x 20 = $100 total

ACC101 (6 decks)

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