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ACC ch. 4
| Question | Answer |
|---|---|
| (solve on sheet) Compute net sales? | Sales - (sales discounts - sales returns) = net sales |
| (solve on sheet) gross profit? | Sales - cost of goods sold = gross profit |
| (solve on sheet)Calculate net income from operations? | (Sales - cost of goods sold) - operating expenses = net income from operations |
| (solve on sheet) Determine the adjustment for inventory shrinkage? | Inventory records - physical count of inventory = shrinkage Dr. COGS Cr. Inventory |
| _____ are the "arrangements" between buyer and seller as to when payments for merchandise are to be made | Credit terms |
| What is the Purchase Discount equation? | 2/10 , n/30 |
| What does the 2 stand for in the Purchase Discount ? (2/10 , n/302/10 , n/30) | Discount Percent |
| What does the 10 stand for in the Purchase Discount ? (2/10 , n/30) | Number of Days discount is available |
| What does the n stand for in the Purchase Discount ? (2/10 , n/30) | Otherwise, "Net" (or all) is Due in 30 Days |
| What does the 30 stand for in the Purchase Discount ? (2/10 , n/30) | The Credit Period |
| ______ updates accounting records for each purchase and each sale in inventory (not question) | Perpetual |
| ______ updates accounting record for purchases and sales of inventory only at the "end of a period" (not question) | Periodic |
| ____ is reported on the balance sheet as a "current asset" | Merchandise inventory |
| ____ refers to products a company "owns" and "intends to sell" | Merchandise inventory |
| _____ cost includes the "cost to buy the goods", ship them to the store, and make them "ready for sale" | Merchandise inventory |
| _____ is the inventory system employing "accounting records" that continuously disclose the amount of inventory | Perpetual Method |
| The _____ keeps a "record showing the inventory" on hand at all times | Perpetual Method |
| What is the journal entry recorded at the sales price which is "HIGHER" than the cost ? | Dr. Cash (or Accounts Receivable) Cr. Sales (revenue account) |
| What is the journal entry recorded at the cost of buying the inventory which is "LOWER" than the sales price? | Dr. Cost of Goods Sold (expense account) Cr. Inventory |
| The sale of inventory is ______ to the Inventory account under the perpetual inventory system | Credited |
| _____ is the inventory system that "determines the inventory" on hand only at the end of the accounting period | Periodic Method |
| The purchase of inventory will be debited to the Purchases account under ______ | Periodic Method |
| "No journal entry" is recorded at the time of the sale of inventory for the cost of the inventory under the _____ | Periodic Method |
| All adjustments such as purchase returns and allowances and discounts are reconciled at the "end of the accounting period" under the _____ | Periodic Method |
| With the ______ there is "not" a general ledger account Cost of Goods Sold. | Periodic system |
| The primary difference between the periodic and perpetual inventory systems is that a Periodic system_____ | determines the inventory on hand only at the end of the accounting period. |
| ____ shows both gross profit and income from operations | Multiple-step income statements |
| _____ refers to customers "returning" merchandise back to the seller for a refund | Sales returns |
| _____ is the "term" used for the expense of buying and preparing merchandise for sale | Cost of Goods Sold |
| _____ are "companies" that would normally offer trade discounts to their customers | Wholesalers |
| ____ is recorded when there is a difference between a "physical count of inventory" and "inventory records" | Inventory shrinkage Dr. Cost of Goods Sold Cr. Inventory |
Created by:
22gonzalez
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