Study Guide for Chapters 4, 5, 6
Study Guide for Chapters 4, 5, 6 Financial Accounting
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This 2 page Study Guide was uploaded by WhitneyG20 on Friday October 9, 2015. The Study Guide belongs to Financial Accounting at Western Kentucky University taught by Dr. Richard Callahan in Summer 2015. Since its upload, it has received 29 views. For similar materials see Financial Accounting in Accounting at Western Kentucky University.
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Date Created: 10/09/15
ACCOUNTING 200 EXAM 2 REVIEW SHEET Shown below is a summary of the major items covered in Chapters 4 5 and 6 This list is not intended to be an allinclusive listing Cash Basis Accounting Method is NOT GAAP Accrual Basis Accounting is Required for External Financial Reports Revenue Recognition Principle recognize in month in which it is earned Expense Recognition Principle recognize expense in same time period as related revenue when expense is incurred or when something is used Why Adjustments are Needed Deferral Adjustments Prepaid Expenses and Deferred Revenue Accrual Adjustments Accrued Revenue and Accrued Expense Adjusted Trial Balance Year End Closing close all revenue expense and dividend accounts so new year begins with zero PostClosing Trial Balance Beginning balances for new year only balance sheet accounts are carried forward to new year MultipleStep Income Statement versus Single Step Income Statement Know definitions of Gross Profit and Income from Operations Perpetual Inventory System constant updating of inventory account 0 what is recorded at time of sale Periodic Inventory System inventory only updated at end of accounting period 0 what is recorded at time of sale How to calculate of Cost of Goods Sold if Periodic Svstem used Sales Transactions including 0 Sales Returns and Allowances 0 Sales Discounts Credit terms and how to calculate sales discount Net Sales and Contra Revenue Accounts Determine inventory quantities physical count Determine who owns it adjust physical count for any of following 0 Merchandise in Transit FOB Shipping Point versus FOB Destination 0 Inventory on Consignment Determine number of items available and number of items sold Calculation of Total Cost of Goods Available to Sell Who uses Specific Identification Inventory Method Calculation of Cost of Goods Sold and Cost of Ending Inventory using three different assumptions if specific identification method not practical FIFO oldest sold first newest in ending inventory LIFO newest sold first oldest in ending inventory Weighted Average total cost of goods availabletotal of units available
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