Accounting Second Exam

Question 1

Perpetual Seller Entry

Answer 1

a. Sales

A/R XXX
Sales Revenue XXX

COGS Expense XXXX
Inventory XXX

b. Sales Returns

Sales Returns XXXX
A/R XXX

Inventory
COGS

Question 2

Perpetual Buyer Entry

Answer 2

a. Purchases

Inventory XXX
A/P XXX

b. Purchase Returns

A/P XXXX
Inventory XXX

Question 3

Periodic Seller Entry

Answer 3

a. Sales

A/R XXX
Sales Revenue XXX

b. Sales Returns

Sales Returns XXXX
A/R XXX

c. Sales Discounts

Cash
Sales Discounts
A/R

d. Shipping (FOB
SGNA Expense
Cash

Question 4

Periodic Buyer Entry

Answer 4

a. Purchases

Purchases XXX
A/P XXX

b. Purchase Returns

A/P XXXX
Purchase Returns XXX

c. Sales Discounts

A/P
Purchase Discounts
Cash

d. Shipping (FOB
Freight- IN
Cash

Question 5

Periodic Formula to determine COGS

Answer 5

Beg Inventory
+ Purchases
(Good Available for Sale)

• Ending Inventory
  (Cost of Goods Sold)

Question 6

If cost of inventory is rising FIFO

Answer 6

COGS lower, EI higher, NI higher, Taxes higher, cash lower

Question 7

Percent of Credit Sales

Answer 7

Percent Given (Credit Sales)

Question 8

Precent of Receivables

Answer 8

Percent Given (Ending Balance of A/R)

Question 9

Straight Line

Answer 9

Depreciation Expense Per Year = (Cost - SV) / useful Life

Question 10

Units of Activity

Answer 10

(Cost - SV)/ Total # Units

Question 11

Double Declining

Answer 11

2/UL x BV

Question 12

Amortization Expense

Answer 12

Cost of Intangible Asset/ Conservative estimate of life

Question 13

Completed Contract vs. Percent Completed

Answer 13

• take all revenue and take into account at the end
• (cost incurred/cost incurred + estimated cost to complete * total revenue (deduct already recognized revenue)