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25 Cards in this Set
- Front
- Back
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Payment made at the beginning of a period is what type of annuity?
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ANNUITY IN ADVANCE
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What type of the annuity is payable at the end of each period.
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ORIGINAL ANNUITY
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What type of the annuity is payable at the BEGINNING of each period.
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ANNUITY DUE
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When an account is written off, BOTH A/R and Allowance for uncollectible accounts are _________
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DECREASED
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1. Make a journal entry to recognize periodic uncollectible accounts expense and provide allowance
2. To write off uncollectible account |
1 Bad debt expense Dr
____ Allowance for uncollectible accounts CR 2 Allowance for uncollectible accounts DR _______ Accounts Receivable CR |
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Current receivables acquired as a result of Customary trade terms are normally reported at ____________ value
Long-term receivables are reported at their ______ value. |
FACE VALUE
PRESENT VALUE |
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The effective interest rate is based on the ________ rate.
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Original CONTRACTUAL RATE
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The interest income reflects the EFFECTIVE INTEREST RATE applied to the ___________ received.
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NET PROCEEDS
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Rent revenue is recognized on a _________ basis, regardless of the payment schedule
Rent RECEIVABLE = |
1. STRAIGHT-LINE
2. Rent Revenue less Cash received |
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Goods out on Consignment remain the property of the ________and must be included on the consignor's BS at _________
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Consignor
COST |
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_________ risk occurs when the amount of an accounting loss exceeds the amount of the associated asset or liability recorded on the BS.
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OFF-BALANCE SHEET RISK
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The lower of cost or market approach requires comparison of the
"designated market" with cost. __________ is replacement cost as long as it is lower than the net realizable value of the inventory and higher than the net realizable value of the inventory reduced by a normal profit margin. |
The designated market = Replacement cost
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Under the PERIODIC METHOD, the ending inventory is priced at the ___________ prices during the year.
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EARLIER
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In order for replacement cost to be reported as the lower of cost or market, REPLACEMENT COST would have to 1 and 2.
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1. be lower than original cost
2 to fall below net realizable value minus a normal profit margin |
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The FIFO Perpetual inventory method will produce _________ ending inventory as the FIFO Periodic method.
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THE SAME
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__________inventory system calculates COGS as the difference between cost of goods available for sale and ending inventory. This system does not maintain records indication what the amount of __________ inventory SHOULD BE.
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PERIODIC INVENTORY SYSTEM
ENDING |
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The advanced commissions are simply a prepayment of future commissions expense. It should be charged to prepaid commissions and then to SELLING expense, NOT to ________ costs
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INVENTORY
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"Market " upper limit =
"Market " lower limit = If REPLACEMENT COST is less than market lower limit - |
= NET REALIZABLE VALUE = selling price - processing costs
= NET REALIZABLE VALUE - NORMAL PROFIT MARGIN -> Market= the lower limit; now Inventory is valued at LOWER Market or Cost |
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In the period of rising prices, changing from FIFO to LIFO will cause
ending inventory to ___________ COGS to ______________ Net Income to ____________ |
DECREASE
INCREASE DECREASE |
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The overstatement of ENDING inventory results in an __________ of COGS => ___________ of Gross Profit
___________ of NI |
UNDERSTATEMENT
OVERSTATEMENT UNDERSTATEMENT |
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INDEX for Dollar-value LIFO at current year =
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CY INVENTORY at current year cost / CY INVENTORY at base-year cost
BASE YEAR - is the year in which Dollar-value LIFO is adopted |
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The LOWER of COST OR MARKET rule will not apply if:
1,2 |
1 The subsequent sales price of an end product is not affected by its market value OR
2 The company has a firm price contract |
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Under GAAP, _________ value is the median of an inventory item's replacement cost, its market ceiling, and its market floor.
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MARKET
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________ cost is the cost to purchase these items of inventory as of the valuation date.
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REPLACEMENT
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