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Intermediate Accounting Exam II
Inventories, PPE, Intangibles,
26
Accounting
Undergraduate 3
11/09/2011

Additional Accounting Flashcards

 


 

Cards

Term
In a perpetual inventory system, if merchandise is returned to the supplier, what is the credit account
Definition
CR. Inventory
Term
COGS =
Definition
BI + NP - EI
Term
By the Gross Method of accounting for purchase discounts, a discount not taken is recorded as:
Definition
Purchases
Term
By the Net Method of accounting for purchase discounts, a discount not taken is recorded as:
Definition
Interest Expense
Term
In a period of declining cost, the use of which inventory cost method would result in the highest ending inventory?
Definition
LIFO
Cheapest inventory is being sold first, older inventory at higher cost is left in inventory.
LIFO = Lower COGS; Higher EI
Term
IFRS does not allow which method of inventory valuation?
Definition
LIFO
Term
LIFO liquidation profits occur when:
Definition
Costs are rising and inventory quantity declines
Term
Gross Profit Ratio =
Definition
Gross Profit/Net Sales
Term
Inventory Turnover Ratio
Definition
COGS / Average Inventory
Term
GAAP defines market value for LCM purposes as:
Definition
Replacement Cost
Term
Net Realizable Value (NRV) =
Definition
Selling Price - Disposal Cost
Term
NRV Represents the ________ limit
Definition
upper
Term
(NRV - NP) represents the ________ limit
Definition
lower
Term
In "NRV-NP" the NP represents what?
Definition
Rate * Selling Price
Term
Inventory Purchase JE
Definition

Perpetual:

DR. Inventory

CR. A/P

 


 

Periodic:

DR. Purchase

CR. A/P

Term
Freight-IN JE
Definition

Perpetual:

DR. Inventory

Cr. Cash

 


 

Periodic

DR. Freight In

Cr. Cash

Term
Purchase Return JE
Definition

Perpetual:

Dr. A/P

Cr. Inventory

 


 

Periodic:

Dr. A/P

Cr. Purchase Returns

Term
Purchase Discount JE
Definition

Perpetual Gross Method:

Dr. AP

Cr. Inventory

 


Periodic Gross Method:

Dr. AP

Cr. Purchase Discounts

Term
Sale JE
Definition

Perpetual

Dr. AR

Cr. Sales Revenue

 

Dr. COGS

Cr. Inventory


Periodic

Dr. AR

Cr. Sales Revenue

Term
End of Period JE
Definition

Perpetual:

No Entry

 


Periodic

Dr. Inventory (Ending)

Dr. COGS

Cr. Inventory (Beginning)

Cr. Purchase Return

Cr. Purchases

Term
PPE Depreciation JE
Definition
Dr. Depreciation
Cr. Acc. Depr
Term
Natural Resource Depreciation JE
Definition
Dr. Depletion
Cr. Natural Resource Asset
Term
Intangible Depreciation JE
Definition
Dr. Amortization
Cr. Intangible Asset
Term
Straight Line Depreciation Formula
Definition
(Acquisition Cost - Residual Value) / Useful Life
Term
The cost of equipment includes:
Definition
Net Purchase Price
Sales Tax
Transportation Cost (Paid by buyer)
Installation Cost
Modification cost
Testing and Trial runs
Term
Research & Development Cost are considered
Definition
Expenses
Dr. RD Exp
Cr. Cash
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