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Accounting > Chapter 5 and 6 > Flashcards

Chapter 5 and 6 Flashcards

1
Q

Net Revenue formula

A
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2
Q

Credit Sales

A

Transfer of product and services to a customer today while bearing the risk of collecting payment from that customer in the future

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3
Q

Trade Discounts

A

a reduction in the listed price of a product or service

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4
Q

Sales return

A

when a customer returns a product

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5
Q

Sales Allowance

A

Any partial refund without the customer returning the product or offering an allowance such as store credit

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6
Q

Contra Revenue Account

A

opposite or contra to that of its related revenue account (sales allowance)

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7
Q

Sales discount

A

reduction in the amount to be paid by a credit customer if payment is made within a specified period of time

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8
Q

Physicians’ Hospital has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $45,000; Allowance for Uncollectible Accounts = $1,000 (credit). On December 31, 2018, Physicians’ estimates uncollectible accounts to be 20% of accounts receivable.
Record the adjustment for uncollectible accounts on December 31, 2018.

A

T- Account

Allowance Uncollectiable Assets

Credit

$1000 intial +

$8000 Adjustment =

$9000 estimated

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9
Q

Physicians’ Hospital has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $45,000; Allowance for Uncollectible Accounts = $1,000 (credit). On December 31, 2018, Physicians’ estimates uncollectible accounts to be 20% of accounts receivable

Determine the amount at which bad debt expense is reported in the income statement and the allowance for uncollectible accounts is reported in the balance sheet.

A
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10
Q

Physicians’ Hospital has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $45,000; Allowance for Uncollectible Accounts = $1,000 (credit). On December 31, 2018, Physicians’ estimates uncollectible accounts to be 20% of accounts receivable

Calculate the net realizable value of accounts receivable.

A

Total Account Receviable - Uncollectiable Allowance Account = Net realizable Value

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11
Q

Southwest Pediatrics has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $113,000; Allowance for Uncollectible Accounts = $1,900 (debit). On December 31, 2018, Southwest estimates uncollectible accounts to be 15% of accounts receivable.
Record the adjustment for uncollectible accounts on December 31, 2018

A
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12
Q

Southwest Pediatrics has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $113,000; Allowance for Uncollectible Accounts = $1,900 (debit). On December 31, 2018, Southwest estimates uncollectible accounts to be 15% of accounts receivable.

Determine the amount at which bad debt expense is reported in the income statement and the allowance for uncollectible accounts is reported in the balance sheet.

A
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13
Q

Southwest Pediatrics has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $113,000; Allowance for Uncollectible Accounts = $1,900 (debit). On December 31, 2018, Southwest estimates uncollectible accounts to be 15% of accounts receivable.

Calculate Net Realizable Value

A
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14
Q

Estimate the amount of uncollectible receivables.

A

Take percentage of all the receivables and add them up

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15
Q

Record the adjustment for uncollectible accounts on December 31, 2018

A

Adjustment of journal, 11,160 - 1400(credit) = adjustment of bad debts and uncollectible accounts

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16
Q

When debit of a bad debt expense how should the formulation go?

A
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17
Q

Formulation of Uncollectible Credit

A
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18
Q

What is the Formulation for Receivable Turnover Ratio?

A
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19
Q

Determining Average Account Receivables?

A
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20
Q

Determining Average Collection Period

A
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21
Q
A

When debit of a bad debt expense how should the formulation go?

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22
Q
A

Formulation of Uncollectible Credit

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23
Q
A

What is the Formulation for Receivable Turnover Ratio?

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24
Q
A

Determining Average Account Receivables?

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25
Q
A

Determining Average Collection Period

26
Q

Cost of Goods Sold measurement?

A

The cost inventory of the firm that was sold

27
Q

What is perptual inventory system

A

recording inventory purchase and sales on a perpetual (continual) basis

28
Q

what is periodic inventory system

A

calculates the balance of inventory once per period at the end based on physical count of inventory

29
Q

what is FOB shipping?

A

title transfer when item shipped from seller to to buyer

30
Q

What is FOB destination ?

A

Title transfer when buyer receives the items

31
Q

Defintion of Freight out?

A

charges for outgoing inventory reported in the income statement either as part of cost of good sold or as an operating expense, usually among selling expense

32
Q

What is freight in?

A

Freight is part of the inventory cost later when sold freight becomes part of COGS reported in the income statement

33
Q

Inventory turnover ratio

A

COGS / Average inventory (B - E)

34
Q

Good Avaliable for Sale

A

Beginning Inventory + Cost of inventory purchased

35
Q

COGS?

A

(Beginning Inventory + Cost of goods purchased (Goods avaliable for sale) ) - ending inventory

36
Q

What is the gross profit ratio?

A

(Gross Profit) / (Net Sales)

37
Q

Gross Profit Formula?

A

Net Sales - COGS

38
Q

Operating Expenses?

A

Recorded on an income statement it’s the expense for selling, general and admin expenses.

39
Q

Return on asset

A

Net Income / Average Total Asset

N.I / ATA

40
Q

Asset Turnover ratio

A

Net Sales / Average Total Asset

N.S. / A.T.A

41
Q

Profit Margin Ratio

A

Net Income / Net Sales

N.I. / N.S.

42
Q

Capitalize

A

Recording an expenditure as an asset

43
Q

Amortization

A

Allocating the cost of intangible assets to expense

44
Q

Reverse

recording inventory purchase and sales on a perpetual (continual) basis

A

What is perptual inventory system

45
Q

Reverse

calculates the balance of inventory once per period at the end based on physical count of inventory

A

what is periodic inventory system

46
Q

Reverse

title transfer when item shipped from seller to to buyer

A

what is FOB shipping?

47
Q

Reverse

Title transfer when buyer receives the items

A

What is FOB destination ?

48
Q

Reverse

charges for outgoing inventory reported in the income statement either as part of cost of good sold or as an operating expense, usually among selling expense

A

Defintion of Freight out?

49
Q

Reverse

Freight is part of the inventory cost later when sold freight becomes part of COGS reported in the income statement

A

What is freight in?

50
Q

Reverse

COGS / Average inventory (B - E)

A

Inventory turnover ratio

51
Q

Reverse

Beginning Inventory + Cost of inventory purchased

A

Good Avaliable for Sale

52
Q

Reverse

(Beginning Inventory + Cost of goods purchased (Goods avaliable for sale) ) - ending inventory

A

COGS?

53
Q

Reverse

(Gross Profit) / (Net Sales)

A

What is the gross profit ratio?

54
Q

Reverse

Net Sales - COGS

A

Gross Profit Formula?

55
Q

Reverse

Recorded on an income statement it’s the expense for selling, general and admin expenses.

A

Operating Expenses?

56
Q

Reverse

Net Income / Average Total Asset

N.I / ATA

A

Return on asset

57
Q

Reverse

Net Sales / Average Total Asset

N.S. / A.T.A

A

Asset Turnover ratio

58
Q

Reverse

Net Income / Net Sales

N.I. / N.S.

A

Profit Margin Ratio

59
Q

Reverse

Recording an expenditure as an asset

A

Capitalize

60
Q

Reverse

Allocating the cost of intangible assets to expense

A

Amortization

Accounting (6 decks)

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