UBC COMM320 MASTER FINAL EXAM
QUESTIONS & ANSWERS 2025/2026
Shareholders Equity = - ANSWERSAssets - Liabilities
Net earnings = - ANSWERSSales revenue - COGS - total expenses
General revenue recognition criteria - ANSWERS1. It is probable that economic benefits will flow
to the company
2. The amount of these benefits can be reliably measured
Journal: Allowance for Bad Debts Expense - ANSWERSDR Bad Debt Expense
CR Allowance for Doubtful Accounts
Journal: Writing off specific receivable - ANSWERSDR Allowance for Doubtful Accounts
CR Accounts Receivable
Journal: Recovery entry for written-off receivable - ANSWERSDR Accounts Receivable
CR Allowance for Doubtful Accounts
DR Cash
CR Accounts Receivable
Journal: Record credit card sale - ANSWERSDR A/R
DR Credit Card Expense
CR Sales Revenue
, Typical sales discount: - ANSWERS2/10, N/30
Why use allowance method? - ANSWERSAllowance method meets accrual accounting standards
by recognizing bad debts expense in the period which the sale occurs, stating A/R at a realistic
amount and providing an allowance for future write-offs
Journal: If historical costs are greater than net realizable value - ANSWERSDR COGS (historical -
NRV)
CR Inventory
Net realizable value = - ANSWERSnormal selling price - estimated costs to make the sale
If: Estimate inventory (gross margin estimation method) - ANSWERSBeginning inventory +
purchases = COGAS - estimated COGS = estimated remaining inventory
If: Calculate ending inventory balance using lower of cost & net realizable value - ANSWERSItem
| Unit Cost | Unit NRV | Lower of two | x # of units | Ending inventory
If: Calculate ending inventory balance using historical unit cost - ANSWERSItem | Unit Cost | #
of units | Ending inventory
Which is better, historical unit cost or Lower of Cost & NRV? - ANSWERSLower of cost & NRV is a
better rep of actual inventory value for financial reporting as current assets shouldn't be
reported as higher than is expected to be generated from their sales
What do we expense things? - ANSWERSWhen we restore or maintain things
Acquisition, demolition, levelling on land is debited to - ANSWERSLand
QUESTIONS & ANSWERS 2025/2026
Shareholders Equity = - ANSWERSAssets - Liabilities
Net earnings = - ANSWERSSales revenue - COGS - total expenses
General revenue recognition criteria - ANSWERS1. It is probable that economic benefits will flow
to the company
2. The amount of these benefits can be reliably measured
Journal: Allowance for Bad Debts Expense - ANSWERSDR Bad Debt Expense
CR Allowance for Doubtful Accounts
Journal: Writing off specific receivable - ANSWERSDR Allowance for Doubtful Accounts
CR Accounts Receivable
Journal: Recovery entry for written-off receivable - ANSWERSDR Accounts Receivable
CR Allowance for Doubtful Accounts
DR Cash
CR Accounts Receivable
Journal: Record credit card sale - ANSWERSDR A/R
DR Credit Card Expense
CR Sales Revenue
, Typical sales discount: - ANSWERS2/10, N/30
Why use allowance method? - ANSWERSAllowance method meets accrual accounting standards
by recognizing bad debts expense in the period which the sale occurs, stating A/R at a realistic
amount and providing an allowance for future write-offs
Journal: If historical costs are greater than net realizable value - ANSWERSDR COGS (historical -
NRV)
CR Inventory
Net realizable value = - ANSWERSnormal selling price - estimated costs to make the sale
If: Estimate inventory (gross margin estimation method) - ANSWERSBeginning inventory +
purchases = COGAS - estimated COGS = estimated remaining inventory
If: Calculate ending inventory balance using lower of cost & net realizable value - ANSWERSItem
| Unit Cost | Unit NRV | Lower of two | x # of units | Ending inventory
If: Calculate ending inventory balance using historical unit cost - ANSWERSItem | Unit Cost | #
of units | Ending inventory
Which is better, historical unit cost or Lower of Cost & NRV? - ANSWERSLower of cost & NRV is a
better rep of actual inventory value for financial reporting as current assets shouldn't be
reported as higher than is expected to be generated from their sales
What do we expense things? - ANSWERSWhen we restore or maintain things
Acquisition, demolition, levelling on land is debited to - ANSWERSLand
