Accounting test #2

Sold on account- journal entry
- Dr accounts receivable
- cr sales revenue
- dr COGS
- cr inventory
Returns on merchandise - journal entry (contra-revenue)
- dr sales returns and allowances
- cr accounts receivable
- dr inventory
- cr COGS
Discounts - journal entry
- dr cash (difference between account receivables-discount)
- cr accounts receivable
- dr inventory
- cr COGS
Net sales
- Sales Revenue
- - Sales returns and allowances
- - Sales discounts
Gross profit

net sales - COGS
Gross profit %

gross profit/net sales X 100
Specific identification
- add up whats sold = COGS
- rest is ending inventory
Inventory turnover

COGS/Average inventory(beg+end/2)
Days in turnover

365/inventory turnover
Allowance for doubtful accounts
- dr bad debt expense
- cr allowance for doubtful accounts
Net realizable value

accounts receivable-allowance for doubtful accounts
Write-off
- dr allowance for doubtful accounts
- cr accounts receivable
Direct write-off
- dr bad debt expense
- cr accounts receivable
Aging method
- dr bad debt expense
- cr allowance

Author

bigtitties420

288302

Card Set

Accounting test #2

Description

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Updated

2014-11-06T01:41:08Z

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