CHP 4 Flashcards
______ 1. (S02) An accounting basis in which revenue is recorded only when cash is received, and an expense is recorded only when cash is paid.
k. Cash basis accounting
______ 2. (S03) Expenses paid in cash and recorded as assets before they are used or consumed.
h. Prepaid expenses
______ 3. (S07) A trial balance prepared after closing entries have been journalized and posted.
f. Post-closing trial balance
______ 4. (S07) Asset, liability, and stockholders’ equity accounts.
j. Temporary accounts
______ 5. (S03) Revenues earned but not yet received in cash or recorded.
e. Accrued revenues
______ 6. (S02) Accounting basis in which transactions are recorded in the periods in which the events occur, rather than in the periods in which the company receives or pays cash.
a. Accrual basis accounting
______ 7. (S07) Revenue, expense, and dividend accounts whose balances are transferred to retained earnings at the end of an accounting period.
c. Accrued expenses
______ 8. (S06) A trial balance prepared after adjusting entries have been journalized and posted.
g. Adjusted trial balance
______ 9. (S03) Entries made at the end of an accounting period to ensure that the revenue recognition and matching principles are followed.
i. Adjusting entries
______ 10. (S07). Entries made at the end of an accounting period to transfer the balances of temporary accounts to Retained Earnings.
b. Closing entries
Formula for cogs:
Beg inventory+purchases-ending balance= cogs
Gross profit rate formula:
Net sales - cogs = gross profit
Inventory turnover formula:
Cogs/average inventory
Days in inventory formula:
Inventory turn over/365
Current ratio formula:
Current assets/current liabilities
