Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
20 Cards in this Set
- Front
- Back
|
Multi Step (236-239)
|
net sales,
gross profit, income from operations, net income |
|
|
Gross Profit Rate=
|
= Gross Profit /Net Sales
|
|
|
Profit margin ratio=
|
=Net income/Net Sales
|
|
|
Cost of goods purchased under periodic system =
|
Purchases-purchase returns,allowances,discounts+freight in
|
|
|
quality of earnings ratio
|
= operating expenses / net income
|
|
|
net sales
|
sales - sales returns/allowances/discounts
|
|
|
multistep (long)
|
sales-allowances,returns,discounts = net sales-cost of goods= gross profit -operating expenses=income from operations +/- remaining expenses,gains=net income
|
|
|
gross profit
|
net sales -cost of goods sold
|
|
|
net income
|
income from operations +/- remaining expenses&gains
|
|
|
cost of goods sold formula under periodic system =
|
beginning inventory+ purchased - Ending Inventory cost (unsold)
|
|
|
Inventory turnover ratio =
|
Cost of goods sold/average inventory
|
|
|
Days in inventory =
|
365 days/inventory turnover ratio
|
|
|
Calculating ending for average
|
Use weight average*remaining # of units. Weight average unit cost = total cost/total units
|
|
|
Weight average unit cost =
|
total cost/total units
|
|
|
FIFO vs Average vs LIFO outcome
|
FIFO gives highest number (overstates), average in the middle, LIFO in the lower numbers (understates, good for taxes)
|
|
|
Types of internal control procedure
|
-Establishment of responsibility (designated personal)
-Segregation of duties -Documentation procedures -Physical controls (safes) -Independent internal verifications (double checking) -Human resource controls (bonding employees, vacations, rotating, background check) |
|
|
How to prepare a bank reconciliation
|
First balance per bank statement: + deposits in transit, - outstanding checks. Then balance per books: other bank memorandum & errors(add credits or collections. subtract debits or expenses, less NSF) Balances should be the same. Group single entries in a single entry together (ex: collections have fees).
|
|
|
Average Inventory
|
Beginning Inventory+Ending Inventory /2
|
|
|
Journalizing Bank Rec (346)
|
READ CAREFULLY. Based on books adjustment, ONLY ADJUSTMENTS. Keep collections with fees in a single entry with separate accounts: Debit Miscellaneous expense for expenses. Remember to include receivables, cash, interest revenue accts where appropriate. Remember notes receivable. Specific accts don't have to be same number but total entry must be equal! NSF become debit accts recievable
Expenses are cash. Then make a cash t account. |
|
|
operating expenses are
|
selling admin expenses, R&D, advertising
|
