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19 Cards in this Set
- Front
- Back
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F.O.B Destination |
Freight term that requires the seller to pay the freight charges Freight out |
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F.O.B. shipping point |
A freight term that requires the buyer to pay the freight charges Freight In |
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Periodic inventory |
A physical count of the units of merchandise on hand (Dunkin) |
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Perpetual inventory |
An ongoing record of the inventory (Less accurate) |
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Purchase Account |
Expense account, normal Debit balance Only used for items that are to be resold Purchases 75000 Accounts Payable 75000 |
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Purchase Returns and Allowances |
Contra-expense account Normal credit balance Accounts Payable 50 Purchases returns and Allowances 50 |
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Purchase Discount |
Contra expense account Normal credit balance Accounts payable 75000 Purchase Discount 1460 Cash 71540 |
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Sales |
Revenue Account, normal credit balance Only the sale of Merchandise
Accounts receivable 200 Sales 200 |
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Sales Returns and Allowances |
Contra revenue Sales Account Return of Merchandise previously sold Normal Debit balance
Sales return and Allowances 50 Accounts Receivable 50 |
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Sales Discounts |
Contra revenue account
Cash 194530 Sales Discount 3970 Accounts Receivable 198500
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Merchandise Inventory |
Unsold Inventory, asset account, no adjusting inventory Beginning inventory placed in debit of income statement Ending inventory placed in credit of income statement |
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Freight-in |
An expense incurred by the buyer when the freight terms are F.O.B shipping point |
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Freight-out |
An expense incurred by the seller when the freight terms are F.O.B. destination |
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Closing Entries 1 |
All revenue accounts are closed into the income statement account Revenue is debited amount of balance, income summary account is credited |
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Closing Entries 2 |
All expense accounts are closed into the income Summary account Expense account is credited for the exact amount of it balance, income statement is debited the amount |
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Closing Entries 3 |
The income Summary account is closed into the Capital account The balance of the income statement summary account is the amount of the net income. This is actually increasing the owners Equity by the amount of the net income. Income summary account is debited and the capital account is credited |
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Closing enteries 4 |
The withdrawals account is closed into the capital account Capital account is debited for the exact amount of the owners withdrawal account and the owners withdrawal account is credited for the same amount |
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Closing enteries order |
Revenue accounts are closed in the income summary account Expense accounts are closed into the income summary account The income summary account is closed into the capital account The withdrawals account is closed into the capital account |
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Cost of goods sold |
The cost of merchandise that was purchased to sell and was actually sold It is an operating expense |
