Accounting
-assets and liability accounts are closed to the balance sheet.
-the post-closing trial balance shows the updated capital account balance.
-the financial statements are prepared from the adjusted trial balance.
-accumulated depreciation is a permanent account and does not close at the end of the period and the balance sheet is carried forward into the next period.
-capital is a permanent account.
-the closing process zeroes out all revenues and expenses.
-current assets will be used up or converted to cash within one year or the businesses operating cycle, whichever is the greater.
-when a company is purchasing inventory, and pays early to take advantage of the purchase discount offered by the vendor, that amount is credited to the inventory account.
-inventory are the items held by a company to be sold to customers.
-net sales revenue is equal to sales revenue less sales returns and allowances, and sales discounts.
-in a multi step income statement, interest revenue and interest expense are not included in operating income.
-the rate of inventory turnover tells how rapidly inventory is sold.
-the sum of the COGS and the ending inventoy equals the cost of gooda available for sale.
-the consistency principle states that the busineses should use the same accounting methods from period to period.
-under the FIFO, the ending inventory is based on the cost of the most recent purchases.
-the value of purchases remains the same irrespective of the inventory valuation method used.
-using FIFO, the COGS is based on the oldest purchases.
-the accounting conservatism principle requires that financial statements should report LEAST favorable figures.
-do not close accumulated depreciation account
*NET INCOME
-GROSS PROFIT PERCENTAGE= GROSS PROFIT/ NET SALES REVENUE
-purcahsed inventory on account=merch inv/acct pay
-returned inventory=act pay/ merch inv
-paid freight bill on purchase=merch inv/cash
-paid merch invoice w. discount period=act pay(D)/ (C)
-the post-closing trial balance shows the updated capital account balance.
-the financial statements are prepared from the adjusted trial balance.
-accumulated depreciation is a permanent account and does not close at the end of the period and the balance sheet is carried forward into the next period.
-capital is a permanent account.
-the closing process zeroes out all revenues and expenses.
-current assets will be used up or converted to cash within one year or the businesses operating cycle, whichever is the greater.
-when a company is purchasing inventory, and pays early to take advantage of the purchase discount offered by the vendor, that amount is credited to the inventory account.
-inventory are the items held by a company to be sold to customers.
-net sales revenue is equal to sales revenue less sales returns and allowances, and sales discounts.
-in a multi step income statement, interest revenue and interest expense are not included in operating income.
-the rate of inventory turnover tells how rapidly inventory is sold.
-the sum of the COGS and the ending inventoy equals the cost of gooda available for sale.
-the consistency principle states that the busineses should use the same accounting methods from period to period.
-under the FIFO, the ending inventory is based on the cost of the most recent purchases.
-the value of purchases remains the same irrespective of the inventory valuation method used.
-using FIFO, the COGS is based on the oldest purchases.
-the accounting conservatism principle requires that financial statements should report LEAST favorable figures.
-do not close accumulated depreciation account
*NET INCOME
-GROSS PROFIT PERCENTAGE= GROSS PROFIT/ NET SALES REVENUE
-purcahsed inventory on account=merch inv/acct pay
-returned inventory=act pay/ merch inv
-paid freight bill on purchase=merch inv/cash
-paid merch invoice w. discount period=act pay(D)/ (C)