Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Random > Accounting sac Revision > Flashcards

Accounting sac Revision Flashcards

1
Q

Define Inventory

A

Goods purchased by a Trading firm to be sold for profit (To create revenue)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Define Fees

A

Cash received by service firms for the completion of a service to a customer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

T-form balance sheet

A

Can be used to show the direct effect of the two-fold effect of transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Two-fold effect

A

For every transaction, there is at least two items that are effected on the balance sheet (3 including GST)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

GST paid by the business…

A

…decreases GST debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

GST received by the business…

A

…increases GST debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is COD and what does it stand for…

A

Cash On Delivery: Cash is paid when the delivery of stock/inventory arrives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Trade Credit is…

A

…when suppliers give their customers a set period of time to sell the inventory they bought before the money has to be paid back

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are at least two effects of selling inventory…

A

1) Inventory decreases (Asset)
2) Cash at Bank Increases (Asset)
3) Cost of Sales Increases (Expense)
4) Owners equity increases (Profit)
5) Increase GST debt (Liability)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is “Cost of Sales”?

A

The cost price of Inventory sold. The expense of the inventory being sacrificed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Goods are sold for $800 plus GST (Cost Price $500). Show the effect on the balance sheet

A 
Inventory (Dec.) - $500
Cash at bank (Inc.) - $880
GST liability (Inc.)  - $80
Cost of sales (Inc.)(Decreases profit) - $500
Owners Equity (Inc.) - $800
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Selling price - Cost price =

A

Profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Accounts receivable does not include GST. True or False?

A

False. Accounts receivable includes GST

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Define Purchases and Sales

A 
Purchases = The cost of inventory bought for the purpose of resale
Sales = Revenue earned from the sale of Inventory bought
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is a purchase Invoice?

A

Evidence of Inventory bought on credit by the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is a sales Invoice?

A

Evidence of Inventory sold on credit to customers by the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

EFT payments are used when you want to…

A

…buy inventory online, quickly and easily.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

EFTPOS Transactions are used when you want to…

A

…sell inventory without handling large amounts of cash. Although you must rent a terminal and pay a bank fee to use.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Service firms record …… and Trading firms record …… in cash journals

A

Fees, Sales

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Capital or Loan can be recorded as ……

A

EFT instead or Receipts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

The heading “Assets” in Cash Payment journals are ….. and are recorded in the statement of receipts and payments as …..

A

non-current assets, one value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

An ………. ……….. column can be provided for rare transactions in Cash Payment journals

A

other expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Buying/Selling on credit - Good’s sold/purchased on credit are ……… unless money is received/paid out from the Accounts (GST column is ………)

A

not recorded, not used when money is received from accounts receivable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

For Trading firms, In Statement of Receipts and Payments “Assets” is recorded as ……… and “Other expenses” can be recorded as either …… or …….

A

One Value, one value or separate values

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What are the three outcome of a stocktake?

A

1) Unit’s of Inventory are correct
2) Unit’s of Inventory are too low
3) Unit’s of Inventory are too high

26
Q

What are some causes of Inventory Loss? (Name at least three)

A

Theft, Oversupply to customers, Undersupply from suppliers, Double invoicing by suppliers, Stocktake errors, Recording errors

27
Q

What are some causes of Inventory Gain? (Name at least three)

A

Oversupply by supplier, Undersupply to customer, Recording errors, Stocktake errors

28
Q

What source document is used to report Inventory Loss/Gain?

A

Memorandum (Memo)

29
Q

Does Identified cost or FIFO apply to Inventory Losses/Gains?

A

FIFO

30
Q

What is a Purchase return?

A

Inventory returned to supplier

31
Q

What is a Sales return?

A

Inventory returned by customer

32
Q

Issued when Inventory is returned to supplier or customer

A

Credit Note

33
Q

Unless using Identified cost, Inventory returned should be recorded in Inventory sheets as……

A

….The last cost price in the ‘Out’ column

34
Q

What is a stocktake?

A

A physical count of the number of units of Inventory on hand

35
Q

Why is a stocktake important?

A

1) Helps calculate annual profit
2) Satisfy’s Taxation Authorities
3) Helps to find any Inventory Loss’s or Gains

36
Q

Define Inventory sheet

A

Document used to record details of Inventory stock

37
Q

What are the two steps of an Inventory stoke take?

A

1) Counting the Inventory

2) Determining the cost price originally paid for the Inventory

38
Q

State the formula for determining cost price using the mark-up method

A

(After taking away GST) Cost of Inventory =

Selling price x 100 / 100 + Mark-up

39
Q

Business can use different methods to put the cost price on Inventory items in store

A

1) Barcodes
2) Number codes
3) Letter codes

40
Q

What is the Perpetual Inventory system?

A

Recording the movement of inventory transactions continuously throughout a period

41
Q

What is Identified cost?

A

(accurate) Cost price is determined for each unit of Inventory

42
Q

What is the FIFO method?

A

(simple/easy) Recording Inventory cost price based on the assumption that first goods bought are first good sold (First-In-First-Out)

43
Q

Is FIFO or Identified cost preferable for most business’s?

A

FIFO

44
Q

Inventory cards have what headings?

A

Date, Reference, In, Out, Balance

45
Q

Does the supplier need to identify the cost price of Inventory returned?

A

Yes, it is not FIFO because they issue the credit note with all the details

46
Q

Income Statement includes Credit sales. True/False?

A

True, Income Statements include cash and credit sales in the revenue column

47
Q

The price of a non-current asset can include…

A

anything that gets the asset ready to use, such as cartage inwards, installation, labelling the item, anything that is paid for the asset when it is bought and that is the end of the expense exc.

48
Q

The price of a non-current asset does not include…

A

GST, anything that is paid “Per annum” or paid on a regular bases such as insurance or registration

49
Q

What headings does Cost of Sales (COS) go under in the balance sheet?

A

Owners Equity

50
Q

Revenue - COS =

A

Profit!

51
Q

What headings does Inventory go under in the balance sheet?

A

Current Assets

52
Q

What is one reason we track Inventory?

A

~ To identify fast and slow moving lines of stock
~ To know what to re-order
~ Allows for setting maximum and minimum levels of stock

53
Q

Define Equipment

A

A resource the business owns/controls (1 mark) that will bring future economic benefit

54
Q

Define Revenue

A

an increase in assets or decrease in liabilities that results in the increase of OE

55
Q

Define Expense

A

an decrease in assets or increase in liabilities that results in the decrease of OE

56
Q

Define Assets

A

Economic resources held by the business from which there is expected to be future economic benefits/inflow of economic benefits

57
Q

Define Liabilities

A

A current obligation which is expected to have future economic outflows/outflow of economic benefits

58
Q

What is a Settlement discount? (Hint: Credit terms)

A

Discounts offered to credit customers to encourage them to pay off their accounts quicker.

59
Q

Why are Settlement discount a benefit to the supplier?

A

Because slow paying Accounts Receivable

60
Q

Why are Settlement discount a benefit to the supplier?

A

Because slow paying Accounts Receivable can be costly to the business

Random (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions