FAR Module 3 Flashcards
Balances Within the Same Bank
Can be Netted
Balances in different banks must…
Be stated separately
What is not considered bank reconciling items but rather “errors”
- NSF Checks
- Service Charges
- Credit Memos
- Interest Income
Cash Collections from Customers
Sales adj by Deducting “AR written off” and deducting “Increase in AR balance”
Are returns included when reporting revenue?
No they are not
Allowance Method
Used to match expenses with revenues & record carrying amount
Factoring Receivables
Process by which company converts receivables to cash by assigning them to a factor either with or without recourse
Pledge of AR involved use of AR as collateral
When cash is received, credit recorded to notes payable
Bonds…
FV * Rate = Interest + FV = Maturity Value and you can go from there
What assumption does the Moving-Average method assume?
Assumes perpetual records - new weighted-average cost is computed after each purchase & issues are priced at latest weighted cost
FOB Shipping Means…
Title reverts to buyer when seller delivers goods
Buyer should include goods upon shipment
Buyer should include inventory
What does a periodic inventory system mean?
Inventory is determined by physical count. Units are counted & valued at end of period
