or the average methods will vary slightly depending on whether the inventory system is periodic or perpetual and whether a dollar-value method based on price indexes was used. Join PRO to Track Progress Mark the...
or the average methods will vary slightly depending on whether the inventory system is periodic or perpetual and whether a dollar-value method based on price indexes was used. Join PRO to Track Progress Mark the...
or stockholders? equity Benefits of Disposing of Obsolete Inventory Since the value of the obsolete items may continue to decrease, it is wise to dispose of the items at any price as soon as possible. The benefits of...
is currently experiencing. For example, if a retailer buys its merchandise for $0.70 and sells the merchandise for $1.00, it has a gross profit of $0.30. The gross profit of $0.30 divided by the selling price of $1.00...
for a small fee that was immediately expensed. Since then Company X has been very effective in promoting this trademarked brand. Consumers now pay a premium price for this recognized and superior product. A competitor...
, such as Sales Discounts or Discounts for xxx. Let me give you an example from the meat industry. We had 40,000 pounds of beef without a local customer, so we sold it to a company 1,000 miles away for the local price of...
is the inventory ______________ ratio. TURNOVER RTNVEOUR Unscramble TURNOVER UTRVRNEO Unscramble 10. The expected selling price in the ordinary course of business minus the estimated costs of completion, disposal, and...
a larger portion of selling and administrative costs while other products require a small portion. Only when a product’s selling and administrative costs are combined with the product’s manufacturing costs will they...
. Example of a Revenue Accrual The accrual of revenues or a revenue accrual refers to the reporting of revenue and the related asset in the period in which they are earned, and which is prior to processing a sales...
is prepared by a company to specify the items being ordered and the quantity, price, terms, and other info. It is one of the documents in the three-way match. purchase order (or) P.O. This multi-copy form is prepared by...
Our Explanation of Evaluating Business Investments compares four of the techniques for reviewing potential capital expenditures. You will be introduced to accounting rate of return, payback, net present value, and...
Our Explanation of Accounts Receivable and Bad Debts Expense helps you understand the accounting for the losses associated with selling goods and providing services on credit. You will understand the impact on the...
inventories and cost of goods sold contain $2 per pound for the materials and its materials purchase price variance account contains an unfavorable variance of $600,000 [1,000,000 X ($2.60 – $2.00)]. To comply with...
assume that a company’s product had a cost of $100 at the start of the year, at mid-year the cost was $105, and at the end of the year the cost was $110. Which cost would you match with the sale of one item at the end...
with a selling price of $12 a unit. SalesMax sends GoodCorp an invoice listing the items, the date shipped of June 15, and payment terms of 2/10, net 30. When GoodCorp receives the 100 units of product, it...
). If replacement cost would have been allowed and used, the gross profit would be $20 (selling price of $165 minus the replacement cost of $145). The amount of phantom or illusory profit was $45 ($65 reported minus $20...
for $100, its gross profit is $20. This results in a gross profit percentage or gross margin ratio of 20% of the selling price. Therefore, when the company has sales of $50,000 it is assumed that its cost of those goods...
, $13 in October. Therefore, ABC’s cost of goods available amounted to $35. Next, assume that 2 units were sold and 1 is in inventory on December 31. Also assume that the retail price remained constant at $16 each....
sold divided by the average inventory 11. Which of the following is a cost of holding inventory? Select... Preparing the purchase order Risk of obsolescence Receiving and stocking the goods ordered from a supplier 12....
of goods sold (which consists of its manufacturing costs) is $28. Therefore, the product’s gross margin is $12 ($40 minus $28), or 30% of the selling price ($12/$40). Difference Between Gross Margin and Profit...
revenue account (such as Sales Revenues, Service Revenues, Fees Earned, etc). Example of Deferred Revenue To illustrate deferred revenue, let’s assume that a company designs websites and has been asked to provide a...
of $300. The company also granted allowances of $200 to customers who received damaged goods or had been given a price adjustment. Given the above information, the company’s sales are calculated as follows: Sales...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
If a company issues stocks or bonds to pay outstanding debt, should this noncash transaction be included in the cash flow statement? If a company issues stocks or bonds for cash and then pays off the debt, the...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
requires two pounds of plastic pellets. The company's practice is to have on hand at the end of each month 60% of the pounds of plastic pellets required for the following month's production. The purchases of...
. Current Market Value Wrong. Because of the cost principle, assets are generally not reported at their current market value. Expected Selling Price Wrong. This would violate the cost principle. 8. Obligations (amounts...
a catalog’s list price. Use the following information for answering Questions 6 - 8: A supplier shipped goods to the buyer on December 28. The buyer received the goods on January 2. The terms were FOB shipping point....
% discount of $90 is allowed if the buyer remits $8,910 within 10 days of the invoice date. Trade Discount A trade discount is a discount expressed as a percentage of a list price. The percentage may vary according to...
Our Explanation of Activity Based Costing illustrates how manufacturing overhead costs for a product will differ when costs are allocated using only the number of machine hours, as opposed to being allocated using the...
... one two three or more 24. Dividend yield is the annual cash dividend per share of stock divided by the __________ __________ per share of stock. Select... book value market price net income 25. The __________ ratio...
Our Explanation of Accounting Basics uses a simple story to introduce important accounting concepts and terminology. It illustrates how transactions will be included in a company's financial statements.
discount This reduction to a distributor’s published price will vary according to the customer’s volume of purchases. trade discount This reduction to a distributor’s published price will vary according to the...
an unfavorable variable manufacturing overhead efficiency variance? Select... Inefficient direct labor An unplanned increase in real estate taxes on the factory An unexpected price in the cost of manufacturing supplies...
the break-even point, each additional unit sold should increase the pretax profit by the amount of the __________ __________ per unit. 6. When calculating the break-even point, it is assumed that the selling price per...
Our Explanation of Inventory and Cost of Goods Sold will take your understanding to a new level. You will see how the income statement and balance sheet amounts are affected by the various inventory systems and cost flow...
and variable costing Neither absorption nor variable costing Use the following information for answering Questions 21 - 25: During the past year a company budgeted, manufactured, and sold 100,000 units of its only...
Our Explanation of Inventory and Cost of Goods Sold will take your understanding to a new level. You will see how the income statement and balance sheet amounts are affected by the various inventory systems and cost flow...
. ELCO purchases goods through a supplier’s catalog which shows only the “list price” for each item. Based on its annual purchase volume from the supplier, ELCO receives a trade discount of 30%. The supplier’s...
Our Explanation of Payroll Accounting discusses the taxes and benefits which are withheld from employees' pay as well as the taxes and benefits that are expenses for the employers. Also provided are examples of the...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
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