Acct 201 Exam 2 WVU with correct answers
Sales |returns |and |allowances |- |verified |answersa |reduction |of |sales |revenues |for |return |of |or |
allowances |for |unsatisfactory |goods.
Allowance |method |- |verified |answerspen |example |- |settling |with |a |discount |for |wrong |type |of |pen
allowance |for |doubtful |accounts |(All. |for |bad |debts, |All. |for |uncollectible |accts) |- |verified |answersa |
CONTRA |ASSET |account |containing |the |estimated |uncollectible |accounts |receivable
Accounts |receivable |- |verified |answersopen |accounts |owed |to |the |business |by |trade |customers
notes |receivable |- |verified |answerswritten |promises |that |require |another |party |to |pay |the |business |
under |specified |conditions
percentage |of |credit |sales |method |- |verified |answersbases |bad |debt |expense |on |the |historical |
percentage |of |credit |sales |that |result |in |bad |debts
aging |of |accounts |receivable |method |- |verified |answersestimates |uncollectible |accounts |based |on |the |
age |of |each |account
perpetual |inventory |system |- |verified |answersa |detailed |inventory |record |is |maintained, |recording |
each |purchase |and |sale |during |the |accounting |period
periodic |inventory |system |- |verified |answersending |inventory |and |COGS |are |determined |at |the |end |of
|the |accounting |period |based |on |a |physical |count
Inventory |turnover |[ratio] |- |verified |answersa |measure |of |the |number |of |times |inventory |is |sold |or |
used |in |a |time |period |such |as |a |year. |The |equation |for |inventory |turnover |equals |the |Cost |of |goods |
sold |divided |by |the |average |inventory.
Net |book |value |- |verified |answersthe |acquisition |cost |of |an |asset |less |accumulated |depreciation
Residual |(salvage) |value |- |verified |answersthe |estimated |amount |to |be |recovered |by |the |company |at |
the |end |of |the |asset's |useful |life
depletion |- |verified |answersthe |systematic |and |rational |allocation |of |the |cost |of |a |natural |resource |
over |the |period |of |its |exploitation
amortization |- |verified |answersthe |systematic |and |rational |allocation |of |the |acquisition |cost |of |an |
intangible |asset |over |its |useful |life |(i.e. |patents)
straight-line |depreciation |- |verified |answersallocates |the |depreciable |cost |of |an |asset |in |equal |periodic
|amounts |over |its |useful |life
units-of-production |depreciation |- |verified |answersallocates |the |depreciable |cost |of |an |asset |over |its |
useful |life |based |on |the |relationship |of |its |periodic |output |to |its |total |estimated |output
Sales |returns |and |allowances |- |verified |answersa |reduction |of |sales |revenues |for |return |of |or |
allowances |for |unsatisfactory |goods.
Allowance |method |- |verified |answerspen |example |- |settling |with |a |discount |for |wrong |type |of |pen
allowance |for |doubtful |accounts |(All. |for |bad |debts, |All. |for |uncollectible |accts) |- |verified |answersa |
CONTRA |ASSET |account |containing |the |estimated |uncollectible |accounts |receivable
Accounts |receivable |- |verified |answersopen |accounts |owed |to |the |business |by |trade |customers
notes |receivable |- |verified |answerswritten |promises |that |require |another |party |to |pay |the |business |
under |specified |conditions
percentage |of |credit |sales |method |- |verified |answersbases |bad |debt |expense |on |the |historical |
percentage |of |credit |sales |that |result |in |bad |debts
aging |of |accounts |receivable |method |- |verified |answersestimates |uncollectible |accounts |based |on |the |
age |of |each |account
perpetual |inventory |system |- |verified |answersa |detailed |inventory |record |is |maintained, |recording |
each |purchase |and |sale |during |the |accounting |period
periodic |inventory |system |- |verified |answersending |inventory |and |COGS |are |determined |at |the |end |of
|the |accounting |period |based |on |a |physical |count
Inventory |turnover |[ratio] |- |verified |answersa |measure |of |the |number |of |times |inventory |is |sold |or |
used |in |a |time |period |such |as |a |year. |The |equation |for |inventory |turnover |equals |the |Cost |of |goods |
sold |divided |by |the |average |inventory.
Net |book |value |- |verified |answersthe |acquisition |cost |of |an |asset |less |accumulated |depreciation
Residual |(salvage) |value |- |verified |answersthe |estimated |amount |to |be |recovered |by |the |company |at |
the |end |of |the |asset's |useful |life
depletion |- |verified |answersthe |systematic |and |rational |allocation |of |the |cost |of |a |natural |resource |
over |the |period |of |its |exploitation
amortization |- |verified |answersthe |systematic |and |rational |allocation |of |the |acquisition |cost |of |an |
intangible |asset |over |its |useful |life |(i.e. |patents)
straight-line |depreciation |- |verified |answersallocates |the |depreciable |cost |of |an |asset |in |equal |periodic
|amounts |over |its |useful |life
units-of-production |depreciation |- |verified |answersallocates |the |depreciable |cost |of |an |asset |over |its |
useful |life |based |on |the |relationship |of |its |periodic |output |to |its |total |estimated |output
