32 terms

Accounting II: AR Unit 3 #28-59

Unit 3: Accounting for Special Procedures
Last-in, first-out inventory costing method (LIFO)
using the price of merchandise purchased last to calculate the cost of merchandise sold first.
Lower of cost or market inventory costing method
using the lower of cost or market price to calculate the cost of merchandise inventory
Maturity date of a note
the date a note is due
Maturity value
the amount that is due on the maturity date of a note
Merchandise inventory turnover ratio
the number of times the average amount of merchandise inventory is sold during a specific period of time
Modified accelerated cost recovery system
depreciation method required by the Internal Revenue Service to be used for income tax calcualtion purposes for most plant assets placed in service after 1986
Net 30
a form of trade credit which specifies payment is expected to be received in full 30 days after the goods are delivered
Notes payable
promissory notes that a business issues to creditors
Notes receivable
promissory notes that a business accepts from customers
Periodic inventory
a merchandise inventory determined by counting, weighing, or measuring items of merchandise on hand
Perpetual inventory
a merchandise inventory determined by keeping a continuous record of increases, decreases, and balance on hand
Personal property
all property not classified as real property
Plant assest record
an accounting form on which a business records information about each plant assest
Prepaid expenses
expenses paid in one fiscal period but not reported as expenses until a later fiscal period
Prinicipal of a note
the original amount of a note
Producation unit method of depreciation
method in which depreciation is computed on the basis of an asset's actual use, instead of the time in service, to match depreciation expense with the revenue generated
unit method of depreciation-calculating estimated annual depreciation expenses based on the amount of production expected from a plant assest
Promissory note
a written and signed promise to pay a sum of money at a specified time
Purchase order
a completed form authorizing a seller to deliver goods with payment to be made later
Real property
land and anything attached to the land
Retail method of estimating inventory
estimating inventory by using a percentage based on both cost and retail prices
Reversing entry
an entry made at teh beginning of oen fiscal period to reverse and adjusting entry made in the previous fiscal period
the amount or percentage of profit lost to shoplifing, employee theft, and paperwork error
material or the amount of material that is spoiled or wasted
Stock ledger
a file of stock records for all merchandise on hand
Stock record
a form used to show the kind of merchandise, quantity received, quantity sold, and balance on hand
Straight line method of depreciation
charging an equal amount of depreciation expense for a plant assest in each year of useful life
Sum-of-the-years' digit method of depreciation
using fractions based on years of a plant asset's useful life
Uncollectible accounts
accounts receivable that cannot be collected
Unearned revenue
revenue received in one fiscal period but not earned until the next fiscal period
Weight-average inventory costing method
using the average cost of beginning inventory plus merchandise purchased during a fiscal period to calculate the cost of merchandise sold
Writing off an account
canceling the balance of a customer account because the customer does not pay