Accounting 1: EXAM 2 UARK |Questions and Answers

Accounting 1: EXAM 2 UARK |Questions and
Answers
Cost of Goods Sold - -Cost of the inventory that was sold during the period.

CALC:
- Beginning Inventory + Purchase
- Goods available for sale - Ending Inventory.

- FIFO - -first in first out

- LIFO - -last in first out

- Gross Profit - -Net Sales - COGS

- Net Income - -(All Revenues - All Expenses) for period.
Shown on Income Statement

- Operating Income - -gross profit - operating expenses

- Perpetual Inventory Method - -Keeps track of inventory levels on a daily
basis.

- Allowance for Uncollectible Accounts - -CONTRA ASSET

Represents amount fo accounts receivable that we expect not to collect.

- Contra Revenue Accounts - -Sales Discount, Sales Returns, Sales
Allowance.

- Net Accounts Receivable - -Accounts Receivable - Allowance for
Uncollectible Accounts.

- Net Revenues (Net Sales) - -Total Revenues - Discounts, Returns, and
Allowances.

- Sales Allowance - -Seller reduces the customer's balance owed or provides
a partial refund because of some deficiency in the company's product or
service.

- Sales Discount (Cash Discount) - -Reduction in amount to be paid on
account by customer if payment is made within specified period.

- Sales Return - -Customer returns product and receives a refund.