Rutgers Intro to Financial Accounting Final || || || || || ||
Exam with accurate detailed solutions || || || ||
What is the Accounting Equation? Also what are the respective normal balances? - ✔✔Assets =
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Liabilities + Owner's Equity || || ||
debit credit credit
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Under assets what 3 types are there? - ✔✔Current Assets, Investments, Property Plant and
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Equipment
Under liabilities what 2 types are there? - ✔✔Current and Long-Term liabilities
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Under Owner's equity what 3 sections are there? - ✔✔Common Stock, Preferred Stock, Retained
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Earnings
What is included in the Income Statement? Also what is the normal balance? What is the product
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of those two items?And where does that amount go? - ✔✔Revenues and expenses
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credit debit ||
revenues- expenses = Net income/loss which is added to retained earnings
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What is a worksheet and is it required? What are the steps in preparation? - ✔✔Optional multiple
|| || || || || || || || || || || || || || || || ||
column tool to help in making financial Statements
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1) Prepare a trial balance on the worksheet
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2) Enter adjusting entries (keying)
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3) Adjust balances and extend correct amount to place in income statement column or balance
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sheet column
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4) Total columns and calculate net income/loss
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5) Close the books, close temporary accounts and keep permanent accounts.
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,6) Post closing trial balance shows about after
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What are the closing entries to close the books? - ✔✔a)Debit revenue accounts and credit income
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summary
b)credit expense accounts and debit income summary
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c)debit/credit (whichever is more) income summary and do the opposite to retained earnings
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d)credit dividends and debit retained earnings
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What are correcting entries? - ✔✔Not adjusting entries, but fixing entries whenever an issue is
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found
What is the formula for COGS? - ✔✔Beginning Inventory + Purchases - ending inventory
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extra: Sales revenue - COGS = Gross profit - Operating Expenses = Net Income
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beginning inventory + COGS = Goods available for sale
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True or false, Service Companies have longer operating cycles. - ✔✔False
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What are the 2 types of inventory systems? - ✔✔Periodic and Perpetual
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Characteristics of a periodic system: - ✔✔Per period inventory count || || || || || || || || ||
Uses purchases account and discount account
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Characteristics of a perpetual system - ✔✔every change in inventory is recorded || || || || || || || || || || ||
Uses inventory and cash and COGS
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Stuff is often purchased and sold on account
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, What is the journalizing for the following:
|| || || || || ||
XYZ company purchases 1000 dollars worth of goods
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XYZ sells half the goods at 50 percent marked up price - ✔✔Purchases 1000
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|| cash 1000 ||
Cash 750 ||
|| sales revenue 750 || ||
What is the journalizing for the following:
|| || || || || ||
XYZ company increases inventory 1000 dollars
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XYZ company sells half the merchandise at 50 percent mark up price - ✔✔Inventory 1000
|| || || || || || || || || || || || || ||
|| cash 1000 ||
Cash 750 ||
|| sales revenue 750 || ||
COGS 500 ||
|| Inventory 500 ||
What is FOB destination and FOB shipping point and how does it affect shipping.freight costs -
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✔✔Freight on board destination - at the destination title(ownership) of the goods changes hands.
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Meaning the seller pays the freight cost || || || || || ||
FOB shipping point - as soon as it gets on the vehicle it changes hands, meaning the buyer pays
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the freight cost
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Under periodic systems what are the ways to calculate the amount of goods? what are their
|| || || || || || || || || || || || || || || ||
advantages - ✔✔FIFO - the general natural way stuff goes out, also generally reduces the impact
|| || || || || || || || || || || || || || || ||
of inflation
||
LIFO - lower income taxes because you report lower incomes
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Exam with accurate detailed solutions || || || ||
What is the Accounting Equation? Also what are the respective normal balances? - ✔✔Assets =
|| || || || || || || || || || || || || || ||
Liabilities + Owner's Equity || || ||
debit credit credit
|| ||
Under assets what 3 types are there? - ✔✔Current Assets, Investments, Property Plant and
|| || || || || || || || || || || || || ||
Equipment
Under liabilities what 2 types are there? - ✔✔Current and Long-Term liabilities
|| || || || || || || || || || ||
Under Owner's equity what 3 sections are there? - ✔✔Common Stock, Preferred Stock, Retained
|| || || || || || || || || || || || || ||
Earnings
What is included in the Income Statement? Also what is the normal balance? What is the product
|| || || || || || || || || || || || || || || || ||
of those two items?And where does that amount go? - ✔✔Revenues and expenses
|| || || || || || || || || || || || ||
credit debit ||
revenues- expenses = Net income/loss which is added to retained earnings
|| || || || || || || || || ||
What is a worksheet and is it required? What are the steps in preparation? - ✔✔Optional multiple
|| || || || || || || || || || || || || || || || ||
column tool to help in making financial Statements
|| || || || || || ||
1) Prepare a trial balance on the worksheet
|| || || || || || ||
2) Enter adjusting entries (keying)
|| || || ||
3) Adjust balances and extend correct amount to place in income statement column or balance
|| || || || || || || || || || || || || || ||
sheet column
||
4) Total columns and calculate net income/loss
|| || || || || ||
5) Close the books, close temporary accounts and keep permanent accounts.
|| || || || || || || || || || ||
,6) Post closing trial balance shows about after
|| || || || || || ||
What are the closing entries to close the books? - ✔✔a)Debit revenue accounts and credit income
|| || || || || || || || || || || || || || || ||
summary
b)credit expense accounts and debit income summary
|| || || || || ||
c)debit/credit (whichever is more) income summary and do the opposite to retained earnings
|| || || || || || || || || || || ||
d)credit dividends and debit retained earnings
|| || || || ||
What are correcting entries? - ✔✔Not adjusting entries, but fixing entries whenever an issue is
|| || || || || || || || || || || || || || ||
found
What is the formula for COGS? - ✔✔Beginning Inventory + Purchases - ending inventory
|| || || || || || || || || || || || ||
extra: Sales revenue - COGS = Gross profit - Operating Expenses = Net Income
|| || || || || || || || || || || || ||
beginning inventory + COGS = Goods available for sale
|| || || || || || || ||
True or false, Service Companies have longer operating cycles. - ✔✔False
|| || || || || || || || || ||
What are the 2 types of inventory systems? - ✔✔Periodic and Perpetual
|| || || || || || || || || || ||
Characteristics of a periodic system: - ✔✔Per period inventory count || || || || || || || || ||
Uses purchases account and discount account
|| || || || ||
Characteristics of a perpetual system - ✔✔every change in inventory is recorded || || || || || || || || || || ||
Uses inventory and cash and COGS
|| || || || ||
Stuff is often purchased and sold on account
|| || || || || || ||
, What is the journalizing for the following:
|| || || || || ||
XYZ company purchases 1000 dollars worth of goods
|| || || || || || ||
XYZ sells half the goods at 50 percent marked up price - ✔✔Purchases 1000
|| || || || || || || || || || || || ||
|| cash 1000 ||
Cash 750 ||
|| sales revenue 750 || ||
What is the journalizing for the following:
|| || || || || ||
XYZ company increases inventory 1000 dollars
|| || || || ||
XYZ company sells half the merchandise at 50 percent mark up price - ✔✔Inventory 1000
|| || || || || || || || || || || || || ||
|| cash 1000 ||
Cash 750 ||
|| sales revenue 750 || ||
COGS 500 ||
|| Inventory 500 ||
What is FOB destination and FOB shipping point and how does it affect shipping.freight costs -
|| || || || || || || || || || || || || || || ||
✔✔Freight on board destination - at the destination title(ownership) of the goods changes hands.
|| || || || || || || || || || || || || ||
Meaning the seller pays the freight cost || || || || || ||
FOB shipping point - as soon as it gets on the vehicle it changes hands, meaning the buyer pays
|| || || || || || || || || || || || || || || || || || ||
the freight cost
|| ||
Under periodic systems what are the ways to calculate the amount of goods? what are their
|| || || || || || || || || || || || || || || ||
advantages - ✔✔FIFO - the general natural way stuff goes out, also generally reduces the impact
|| || || || || || || || || || || || || || || ||
of inflation
||
LIFO - lower income taxes because you report lower incomes
|| || || || || || || || ||
