24 terms

# acc test

###### PLAY
Generally, the revenue account for a merchandising business is entitled
Sales
the term applied to the excess of net revenue from sales over the cost of merchandise sold?
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
Merchandise subject to terms 1/10, n/30, FOB shipping point, is sold on account to a customer for \$25,000. The seller issued a credit memo for \$10,000 prior to payment. What is the amount of the cash discount allowable
\$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
Merchandise is sold for cash. The selling price of the merchandise is \$3,000 and the sale is subject to a 7% state sales tax. The journal entry to record the sale would include
(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
For the year ended December 31, 2011 Depot Max's cost of merchandise sold was \$54,350. Inventory turnover was 7.9 Depot Max's number of days sales in inventory is closest to
47
IC fitness has a inventory turnover of 11.2 Ic fitness number of days sales in inventory is
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
A 60-day, 12% note for \$10,000, dated May 1, is received from a customer on account. The maturity value of the note is
\$10,200
If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as
FOB shipping point
The receivable that is usually evidenced by a formal instrument of credit is a(n)
note receivable
The amount of the promissory note plus the interest earned on the due date is called the
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