Final Flashcards
Net Income
Revenue - Expenses
Assets =
Liabilities + Shareholder’s Equity
Net Sales
total sales - estimate of sales returns and allowances - sales discount
Gross profit
net sales - COGS
Net Accounts Receivable
Accounts Receivable - Allowance for Doubtful Accounts
Net Sales Method
Bad Debt Expense = Credit Sales * % Uncollectable
Aging Method
Bad Debt Expense = Sum (Age * %)
Straight Line Method for Depreciation
(Cost - Salvage) / Useful Life
Change in Estimation - Salvage Value
Depreciation Expense = (BV-New Salvage)/# yr. remaining
Change in Estimation - Useful Life
New Depreciation Expense = (BV-Salvage)/# yr. Remaining
Impairment
Fair Value
Disposal - Gain
Sales Price > BV
Disposal - Loss
Sell Price < BV
Gross Margin
Revenue - COGS
Gross Accounts Receivable
AR + ADA
Ending ADA
Ending ADA = Beginning ADA – Write-Offs + Recoveries + Bad Debt Expense
