# acc test

### 24 terms by Collins36

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Sales

Gross Profit

### Merchandise with a sales price of \$800 is sold on account with term 2/10, n/30. The journal entry to record the sale would include a

Credit to Sales for \$800

\$150

### 4/15 n/30

Customer Would receive a 4 percent discount if paid before 15 days it must all be paid for in 30 days

(3,000*.07)

### last-in, first-out

Ending inventory is made up of the oldest purchases when a company uses

### Inventory Turnover ( Formula)

Cost of goods sold / Average Inventory

### Average Inventory ( Formula )

Beginning Inventory ( Cost) + Ending Inventory (Cost /2

### Average days to sell the inventory

365(days)/ Inventory Turn over

47

32.5

### For the year ended December 31, 2011 Depot Max's cost of merchandise sold was \$54,350. Inventory at the beginning of the year was \$6,540. Ending inventory was \$7,250. Compute Depot Max's inventory turnover for the year.

7.9
(Avg Inv = 6540+7250/2 = 6895
Inv Turnover = 54,350 / 6,895 )

### The two methods of accounting for uncollectible receivables are

he allowance method and the Direct Write - off Method

### Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

when an account is determined to be worthless

### If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

Accounts Receivable

### Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write-off this account, Dalton should debit

Allowance for Doubtful Accounts and credit Accounts Receivable

\$10,200

### If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as

FOB shipping point

note receivable

maturity value

### The journal entry to record a note received from a customer to apply on account is

debit Notes Receivable; credit Accounts Receivable

### On October 1, Black Company receives a 6% interest bearing note from Reese Company to settle a \$20,000 account receivable. The note is due in six months. At December 31, Black should record interest revenue of

300 [20,000.06(90/360)]

### A \$6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is

debit Accounts Receivable, \$6,120; credit Notes Receivable, \$6,000; Credit Interest Revenue, \$120

Example: