Chapter 13 Flashcards
(12 cards)
If a business does not keep track of sales made on credit, how can it get this information?
This information can be poured from the opening and closing balances on the RLCA
What is the equation to calculate credit sales?
Closing receivable= opening receivable+ credit-payments received
What can impact the closing trade receivable balance?
Contra
What is the calculation for credit purchases?
Closing payables= opening payables+ credit purchases-payments made
Define cost structure
The relationship in terms between sales, cost of goods and gross profit
Define margin
Gross profit expressed as a percent of sales
Define markup
The person added the cost of good sold so as to arrive at the selling price
Define incomplete records
Accounting records, which are not a full set of primary records and general ledger accounts
If the owner withdraw money from the business for personal use, how does this get recorded?
Via Journal
What journal is used for the owner taking money from the business?
Debit drawing statement of financial position and credit cash statement of financial position
How is it recorded if the owner takes goods for their own personal use from the business?
Debit drawings, statement of financial position and credit purchases statement of profit and loss
What are the reasons balances may not be in line with expectations?
It is an accounting process, fraud or creative accounting, large transactions around the year and dates which dissort info
