Accounting

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Review sheet Test 2
Chapters 4 & 5
(33 Multiple choice)

Chapter 4
▪ Definitions or calculations presentation on financial statements- Net Sales, COGS, gross profit, selling and administrative expenses o Sale - sale discount = Net sales
o Net sale – COGS = Gross profit
o Sale discount + net sale= sale
o Sale – net sale = sale dis
o Net sale – gross profit= COGS
New asset -> inventory
Expense -> COGS
Revenue -> sales
Contra revenue (debit) – sale returns + allowances (debit)
Sale discount (debit)
Sale – sales return + allowance – sale discount = net sales Selling expenses: related to advertising and selling products including sales salaries, sales commissions, advertising, depreciation on items used in sales, and delivery expense. Administrative expenses: office expense, such as the salaries of the company president and office employees, depreciation of items used in administration, rent, utilities and property tax on the office building. ▪ Perpetual vs. Periodic- info about methods and differences o Perpetual: An inventory system in which the business keeps a continuous record of inventory on hand and the cost of good sold. o Continuous updating of inventory as you go thru the paid physical count still must be count once a year. o Periodic: do not update inventory act as you go, you calculate cost and good so that entry act paid. o Beg inventory + Purchase = Good available for sale – end inventory= COGS. ▪ FOB shipping point

o Seller (title transfer to buyer) -> truck ( buyer owns) -> buyer ( buyer pay the shipping) ▪ FOB destination
o Seller(pay the shipping) ->truck(seller owns buyer) ->buyer( title transfer to seller) ▪ Credit terms: 2/10, n/30 2% discount if the amount is paid within 10days, with the balance due in 30 days. ▪ Calculate the discount:

o Sale amount – sale allowance = net sale * dis rate =...
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