Chapter 5 (Installment and Cost Recovery) Flashcards
1
Q
How do you find gross profit percentage?
A
Gross profit/sales price
2
Q
One percentage is gross profit, the other is?
A
Cost recovery percentage
3
Q
How do you record installment sales?
A
Debit Accounts Receivables, Credit Inventory and Deferred Gross Profit
4
Q
How do you record cash collection?
A
Debit Cash, Credit Accounts Receivable
5
Q
How do you recognize gross profit from installment sales?
A
Debit Deferred Gross Profit, Credit Realized Gross Profit
6
Q
How do you realize gross profit on cost recovery?
A
Gross profit is recognized once all of the COST OF GOODS SOLD has been accumulated
