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Flashcards in Chapter 5 and 6 Deck (60)
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1

Net Revenue formula 

2

Credit Sales 

Transfer of product and services to a customer today while bearing the risk of collecting payment from that customer in the future

3

Trade Discounts 

a reduction in the listed price of a product or service 

4

Sales return 

when a customer returns a product 

5

Sales Allowance

Any partial refund without the customer returning the product or offering an allowance such as store credit 

6

Contra Revenue Account 

opposite or contra to that of its related revenue account (sales allowance)

7

Sales discount 

reduction in the amount to be paid by a credit customer if payment is made within a specified period of time 

8

Physicians' Hospital has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $45,000; Allowance for Uncollectible Accounts = $1,000 (credit). On December 31, 2018, Physicians' estimates uncollectible accounts to be 20% of accounts receivable.
 Record the adjustment for uncollectible accounts on December 31, 2018.

T- Account

Allowance Uncollectiable Assets

            Credit 

$1000 intial +

$8000 Adjustment =

$9000 estimated 

9

 

Physicians' Hospital has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $45,000; Allowance for Uncollectible Accounts = $1,000 (credit). On December 31, 2018, Physicians' estimates uncollectible accounts to be 20% of accounts receivable

Determine the amount at which bad debt expense is reported in the income statement and the allowance for uncollectible accounts is reported in the balance sheet.

10

Physicians' Hospital has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $45,000; Allowance for Uncollectible Accounts = $1,000 (credit). On December 31, 2018, Physicians' estimates uncollectible accounts to be 20% of accounts receivable

Calculate the net realizable value of accounts receivable.

Total Account Receviable - Uncollectiable Allowance Account = Net realizable Value 

11

Southwest Pediatrics has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $113,000; Allowance for Uncollectible Accounts = $1,900 (debit). On December 31, 2018, Southwest estimates uncollectible accounts to be 15% of accounts receivable.
  Record the adjustment for uncollectible accounts on December 31, 2018

12

Southwest Pediatrics has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $113,000; Allowance for Uncollectible Accounts = $1,900 (debit). On December 31, 2018, Southwest estimates uncollectible accounts to be 15% of accounts receivable.
 

Determine the amount at which bad debt expense is reported in the income statement and the allowance for uncollectible accounts is reported in the balance sheet.

13

 

Southwest Pediatrics has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $113,000; Allowance for Uncollectible Accounts = $1,900 (debit). On December 31, 2018, Southwest estimates uncollectible accounts to be 15% of accounts receivable.

Calculate Net Realizable Value 

14

Estimate the amount of uncollectible receivables.

Take percentage of all the receivables and add them up 

15

Record the adjustment for uncollectible accounts on December 31, 2018

Adjustment of journal, 11,160 - 1400(credit) = adjustment of bad debts and uncollectible accounts

16

When debit of a bad debt expense how should the formulation go?

17

Formulation of Uncollectible Credit 

18

What is the Formulation for Receivable Turnover Ratio?

19

Determining Average Account Receivables?

20

Determining Average Collection Period 

21

When debit of a bad debt expense how should the formulation go?

22

Formulation of Uncollectible Credit 

23

What is the Formulation for Receivable Turnover Ratio?

24

Determining Average Account Receivables?

25

Determining Average Collection Period 

26

Cost of Goods Sold measurement?

The cost inventory of the firm that was sold 

27

What is perptual inventory system 

recording inventory purchase and sales on a perpetual (continual) basis 

28

what is periodic inventory system 

 calculates the balance of inventory once per period at the end based on physical count of inventory 

29

what is FOB shipping?

title transfer when item shipped from seller to to buyer 

30

What is FOB destination ?

Title transfer when buyer receives the items

31

Defintion of Freight out?

charges for outgoing inventory reported in the income statement either as part of cost of good sold or as an operating expense, usually among selling expense 

32

What is freight in?

Freight is part of the inventory cost later when sold freight becomes part of COGS reported in the income statement 

33

Inventory turnover ratio

COGS / Average inventory (B - E) 

34

Good Avaliable for Sale

Beginning Inventory + Cost of inventory purchased 

35

COGS?

(Beginning Inventory  + Cost of goods purchased (Goods avaliable for sale) ) - ending inventory 

36

What is the gross profit ratio?

(Gross Profit) / (Net Sales)

37

Gross Profit Formula?

Net Sales - COGS

38

Operating Expenses?

Recorded on an income statement it's the expense for selling, general and admin expenses.

39

Return on asset 

Net Income / Average Total Asset 

 

N.I / ATA 

40

Asset Turnover ratio 

Net Sales / Average Total Asset 

 

N.S.  /  A.T.A 

41

Profit Margin Ratio 

Net Income / Net Sales 

 

N.I. / N.S.

42

Capitalize

Recording an expenditure as an asset 

43

Amortization 

Allocating the cost of intangible assets to expense 

44
Reverse

recording inventory purchase and sales on a perpetual (continual) basis 

What is perptual inventory system 

45
Reverse

 calculates the balance of inventory once per period at the end based on physical count of inventory 

what is periodic inventory system 

46
Reverse

title transfer when item shipped from seller to to buyer 

what is FOB shipping?

47
Reverse

Title transfer when buyer receives the items

What is FOB destination ?

48
Reverse

charges for outgoing inventory reported in the income statement either as part of cost of good sold or as an operating expense, usually among selling expense 

Defintion of Freight out?

49
Reverse

Freight is part of the inventory cost later when sold freight becomes part of COGS reported in the income statement 

What is freight in?

50
Reverse

COGS / Average inventory (B - E) 

Inventory turnover ratio

51
Reverse

Beginning Inventory + Cost of inventory purchased 

Good Avaliable for Sale

52
Reverse

(Beginning Inventory  + Cost of goods purchased (Goods avaliable for sale) ) - ending inventory 

COGS?

53
Reverse

(Gross Profit) / (Net Sales)

What is the gross profit ratio?

54
Reverse

Net Sales - COGS

Gross Profit Formula?

55
Reverse

Recorded on an income statement it's the expense for selling, general and admin expenses.

Operating Expenses?

56
Reverse

Net Income / Average Total Asset 

 

N.I / ATA 

Return on asset 

57
Reverse

Net Sales / Average Total Asset 

 

N.S.  /  A.T.A 

Asset Turnover ratio 

58
Reverse

Net Income / Net Sales 

 

N.I. / N.S.

Profit Margin Ratio 

59
Reverse

Recording an expenditure as an asset 

Capitalize

60
Reverse

Allocating the cost of intangible assets to expense 

Amortization