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1
Q

what are the three types of businesses?

A

Service, merchandising, manufacturing

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2
Q

periodic versus perpetual

A

periodic method is a physical inventory count perpetual is automatically in the system

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3
Q

what is transportation in?

A

and I can’t use record the transportation charges on merchandise purchased

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4
Q

perpetual inventory method

A

A continuous record of all merchandise on hand

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5
Q

periodic inventory method

A

requires that a count be made of all inventory at the end of the fiscal period

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6
Q

physical inventory

A

A count of all goods on hand

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7
Q

The 500s are cost of goods sold accounts

A

600s are expenses

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8
Q

on the return is store sales returns and allowances credit or debit?

A

debit

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9
Q

Store sales returns and allowances is

A

normally debited

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10
Q

Credit invoice

A

The source document issued by the seller to indicate the amount of credit allowed to a customer for returned or defective goods

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11
Q

sales discount

A

offered to encourage early payment of customer account balances

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12
Q

purchases

A

The cost of merchandise purchased for resale is recorded in this account

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13
Q

purchases returns and allowances

A

used by the buyer to record the return of goods

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14
Q

delivery expense

A

used to record the cost of delivering merchandise to customers

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15
Q

how is cash purchase of merchandise dealt with on periodic versus perpetual

A

periodic uses purchases account

perpetual uses merchandise inventory

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16
Q

how does the return work on a perpetual inventory system?

A

cash is debited, merchandise inventory is credited

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17
Q

how is a purchase discount recorded on perpetual system?

A

instead of using purchase discount account merchandise inventory is credited

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18
Q

sale of merchandise on perpetual inventory system

A

cash is debited, sales credited

in a different entry,

cost of goods sold is debited merchandise inventory is credited

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19
Q

how was sales of merchandise recorded in periodic system?

A

cash is debited

sales are credited

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20
Q

how does the sales return work using a perpetual system?

A

sales returns and allowances is debited cash is credited

merchandise inventory is debited cost of goods sold is credited

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21
Q

how to record inventory storage

A

only occur on perpetual inventory system’s

inventory shortage is debited merchandise inventory is credited

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22
Q

what provinces use HST?

A

Newfoundland and Labrador
New Brunswick
Nova Scotia and
Ontario

nova Scotia has 15% the rest are 13%

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23
Q

What percent is the GST?

A

5%

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24
Q

what percentage is PST?

A

7 in British Columbia and Manitoba,
5 in Saskatchewan,
9.5 in Quebec,
10% in Prince Edward Island

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25
what does GST stand for?
goods and services tax
26
what does HST stand for?
harmonized sales tax combines GST and PST
27
what is input tax credit?
The amount of GST a business pays other businesses when it buys goods or services
28
how do you pay the monthly amount of GST/HST?
GST payable is debited GST refundable and cash are credited
29
what does PST stand for?
provincial retail sales tax
30
how do you record a sale with tax?
cash debited, GST payable and sales credited
31
what is PST collected from customers called?
PST payable
32
how does the quick method of taxes work?
take your sales add GST and multiplied by 1.8% to determine GST owing to the government
33
why use the quick method?
A business now does not need to keep track of the GST/HST it pays on purchases for small businesses
34
what are two reasons people use credit and debit cards?
they don't have to carry a large amount of cash, buy things even when you do not have the cash at the time
35
what goes into a schedule of cost of goods sold?
merchandise inventory add purchases, less purchase returns and allowances less purchase discount net purchase cost ``` add transportation in total cost of merchandise purchased cost of merchandise available for sale less merchandise inventory equals cost of good sold ```
36
audit
A periodic check of the businesses accounting records
37
internal accounting control
used to protect assets and ensure the reliability of records and statements
38
what are the procedures in cash control?
separation of duties, immediate listing of cash receipts, daily cash proof, daily deposit of cash, payment by check, petty cash procedures, periodic audits, monthly bank reconciliation
39
what is separation of duties?
used to discourage fraud and theft as well as ensure the accuracy of accounting data different people carry out the task of recording cash received in the task of actually handling the cash
40
which procedures ensure the accuracy of cash receipts?
immediate listing of cash receipts, daily cash proof, daily deposit of cash
41
what is cash short and over account used for?
used to record shortages and overages of cash
42
when is cash short and over used?
when the sales and cash balances don't match
43
how are shortages recorded?
debit to cash short and over
44
how are overages handled?
recorded as credits in cash short and over
45
how does payment by check work?
all cash payments made by business should be made by check this is to ensure there's a supporting document for each purchase
46
what is a petty cash fund?
an amount of cash kept on hand to make small payments usually $100
47
how do you start a petty cash fund?
debit petty cash, credit cash
48
what is the petty cash voucher?
A signed authorization for small payments
49
how do you replenish petty cash fund?
debit the account that used petty cash, credit cash
50
to change the size of petty cash fund debit it along with the other accounts
g
51
what is a bank debit memo?
A bank debit memo indicates a decrease in a depositors account
52
what is an NSF cheque?
not sufficient funds in the account of the person who wrote the check
53
what is a bank credit memo?
i've been credit memo indicates an increase in the depositors account
54
what is a cancelled cheque?
A cheque that has been cashed by the bank
55
what is a reconciliation statement?
make sure the banks records are in agreement with the depositors records
56
what are outstanding checks?
checks issued but not yet cashed
57
what is involved in a bank reconciliation statement?
Bank statement balance add unrecorded deposit less insane and checks final bank balance check record balance add interest earned subtract service charges correct chequebook balance
58
how do you record an NSF check?
debit the account receivable credit cash
59
how do you record a bank service charge?
debit bank service charges credit cash
60
how do you record interest earned or interest expense?
cash debit interest earned credit or interest expense debit cash credit
61
what is a bad debt?
Uncollectible amounts owed by customers
62
what is bad debt expense?
The loss due to uncollectable amounts
63
cost of goods sold is a revenue on income statement
h
64
what is allowance for doubtful accounts?
A contra count to accounts receivable
65
what are the two methods of estimating bad debts?
income statement method or balance sheet method
66
what is the income statement method?
use a percentage of net sales to estimate bad debt expense
67
what is the balance sheet method?
using the Accounts Receivable ageing analysis it lists the balance owing by each customer and how long it has been owed
68
what is the net realizable accounts receivable?
accounts receivable less estimated bad debts
69
how do you write off an account receivable?
debit allowance for doubtful accounts | credit customers account
70
how do you write a payment on an account previously written off?
accounts Receivable debited allowance for doubtful account credited then cash debited Accounts Receivable credit
71
what are accrued expenses?
expenses that have been incurred but not yet recorded
72
what are accrued salaries?
salaries earned but not yet paid
73
what is accrued revenue?
revenue earned during fiscal period but not yet recorded
74
what is a classified income statement?
has three sections revenue cost of good sold and operating expenses
75
why are classified financial statements used?
they are used to help the people who examine the financial data
76
what is the matching principle?
requires expenses to be recorded at the same time with the revenues they helped earn
77
what is the revenue recognition principle?
revenues must be recorded in the period in which there are earned
78
what is the consistency principal?
requires the same methods and procedures be used from period to period
79
in the worksheet what are the two different ways of perpetual system differs from the periodic system?
cost of goods sold is recorded the sales and there's no adjustment needed for merchandise inventory
80
cost of goods sold is found in the expense section for a perpetual inventory system
h

Accounting (7 decks)

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