Account Normal Balances (CHT 5) Flashcards
What is the type of account and normal balance of Cost of Goods Sold?
Debit; Expense
What is the type of account and normal balance of Sales Returns and Allowances?
Debit; Contra Revenue
What is the type of account and normal balance of Sales Discount?
Debit; Contra Revenue
What is the type of account and normal balance of Merchandise Inventory?
Debit; Asset
What is the type of account and normal balance of Sales?
Credit; Revenue
What is the type of account and normal balance of Quantity Discount?
Debit; Contra Revenue
What is the type of account and normal balance of Freight Out?
Debit; Expense; FOB Destination (Paid by Seller)
What is the type of account and normal balance of Freight In?
Debit; Expense; FOB Shipping (Paid by Buyer)
What is the type of account and normal balance of Purchases?
Debit; Asset
What is the type of account and normal balance of Purchase Discounts?
Credit; Contra Asset
What is the type of account and normal balance of Purchase Returns and Allowances?
Credit; Contra Asset
How to calculate Gross Profit Margin?
Gross Profit/ Net Sales
How to calculate Profit Margin?
Profit/ Net Sales
How to calculate Profit from Operations?
Gross Profit - Operating Expenses
How to calculate Net Sales?
Sales - Sales Discounts, Allowances, Returns
How to calculate Net Purchases?
Purchases - Purchase Discounts, Allowances, Returns
What is Gross Sales?
Total Sales before - contra revenue accounts
How to calculate Gross Profit?
Net Sales - Cost of Goods Sold
How to calculate Cost of Goods Sold in Periodic Inventory System?
Beginning Inventory + Cost of Goods Purchases - Ending Inventory = COGS
What is Cost of Goods Available for Sale?
Beginning Inventory (Cost of goods on hand at start) + Purchases (cost of goods purchased during the period)
How to calculate Cost of Goods Purchased?
Net Purchases + Freight In
