Exam 3

Question 1

Fob shipping

Answer 1

Ownership passes to buyer when loaded

Question 2

Fob destination

Answer 2

Ownership passes to buyer when delivered

Question 3

Consigned goods

Answer 3

Are in possession of the consigned

Question 4

LIFO reserve

Answer 4

FIFO inventory - lifo inventory

Question 5

Inventory COGS method journal entry

Answer 5

COGS
Inventory

Question 6

Inventory loss method

Answer 6

Inventory loss
Inventory

Question 7

Inventory turnover

Answer 7

Cogs/average inventory

Question 8

average days to sell

Answer 8

365/inventory turnover

Question 9

Price ceiling

Answer 9

Selling price - cost to distribute

Question 10

Price floor

Answer 10

Price ceiling - normal profit margin

Question 11

COGS FORMULA

Answer 11

Beginning inventory + purchases - ending inventory

Question 12

Cash equivalents

Answer 12

Treasury bills, certificates of deposit, commercial paper, money market funds

Question 13

Restricted cash

Answer 13

Plant expansion, retirement of long term debt, contractual agreement

Question 14

Bank overdraft

Answer 14

Current liability

Question 15

Direct write off method journal entry

Answer 15

Bad debt exp
AR

Write off
Allowance for doubtful accounts
AR

Question 16

Allowance method

Answer 16

Bad debt exp
Allowance for doubtful accounts

Question 17

Accounts recivables turnover

Answer 17

Finds liquidity of ar

Question 18

Average days to collect receivables

Answer 18

Rule is that the average collection period should not greatly exceed the credit period