Accounting chapter 1 review Flashcards
Gross Profit Ratio
gross profit/ net sales
Return on Assets
Net income/ Average total assets
Profit Margin
Net Income/ Net sales
Asset Turnover
Net sales/ average total assets
Return on equity
Net income/ average SE
gross profit
sales revenue- cost of goods sold
Net revenue
service revenue - sales allowance = net sales
straight line depreciation method
depreciable cost/ service life
double declining balance
depreciation rate= 2/service life
depreciation expense= book value x depreciation rate
activity based
depreciation rate per hour= depreciable cost/ total hours expected to be used
depreciation expense= depreciation rate per hour x actual hours used
DEALOR
D- DIVIDENDS. L- LIABILITIES
E- EXPENSES. 0- SE
A- ASSETS. R- REVENUES
IMPAIRMENT LOSS
ASSET BOOK VALUE- FAIR VALUE
Weighted average cost
cost of goods availible/ # of units availible for sale
Interest
face value x interest rate x fraction of the year
Goodwill
purchase price -
assets - liabilities
= goodwill
