How Do you use the BASE method when determining items in AR?
Beginning AR + Purchases + Sales - Cash Collections - Write Off's _______________ Ending AR
What is the entry to recognize Bad Debt Expense?
Bad Debt Expense Allowance for Uncollectible
What is the entry to account for the recovery of accounts written off?
AR Allowance for Uncollectible Cash AR
What is the JE when interest is accured?
What liability exists for
Factoring with Recourse?
The maturity or face value amount is the contingent liability and needs to be disclosed in the financial statements.
What is a factor's holdback?
Accounts for the proceeds retained by the factor to cover the below:
- sales discounts
- sales returns
- sales allowances.
What is the journal entry for
Factoring without recourse?
*Plug loss or gain accordingly
What is the Interest Method?
Recognizes interest revenue each year until the note is collected because estimated future cash flows to be received include interest.
What is inventory?
Always considered a current asset.
Valued at lower of
How do you calculate
Beginning Inventory + Net Purchases
= Goods Available for Sale
Goods Avalable for Sale — COGS
= Ending Inventory
*To isolate COGS, just calculate GAFS — Ending Inv.
How do you calculate Net Purchases?
Gross Purchases =
+ Freight In
- Purchase returns and allowances
- Purchase Discounts
Whe prices are rising,
what is the effect of FIFO?
- - Lowest COGS
- ⁃ Highest Net income
- ⁃ Highest Ending Inventory
When prices are rising,
what is the effect of LIFO?
- Highest COGS
- ⁃ Lowest NI
- ⁃ Lowest Ending Inventory
Freight Out is a
What factor does the
Timing of Sale
play in Periodic LIFO Inventory?
Timing of Sale is irrelevant for