Term
| what is the formula for working capital? |
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Definition
| Current assets - Current Liabilities |
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Term
| what is the formula for current ratio? |
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Definition
| Current Assets / Current Liabilities. |
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Term
| How do you figure net income percentage? |
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Definition
| Net income / Total Revenue |
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Term
| How do you figure Return on Equity? |
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Definition
| Net income / Average Stockholders Equity |
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Term
| How do you calculate Gross Profit Rate? |
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Definition
| Divide Gross profit by net sales. |
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Term
| How do you record a purchase at net cost? |
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Definition
Debit Inventory
Credit Accounts Payable |
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Term
| How do you record the loss of a cash discount? |
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Definition
D.R. Accounts Payable
D.R. Purchase Discounts Lost
Credit - Cash |
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Term
| How do you compute interest? |
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Definition
| Principle X Rate X (x/12) |
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Term
| what is unearned revenue? |
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Definition
| Cash collected in advance of a service that will be performed. |
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Term
| What is the purpose of adjusting entries? |
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Definition
| to make sure that revenues and expenses are properly recorded. |
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Term
| What accounts are affected by adjusting entries? |
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Definition
Supplies
Prepaid Insurance
Prepaid Rent
Depreciation
Salaries and WAges
Interest
Revenue Earned
Income Taxes |
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Term
| How do you figure out net income? |
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Definition
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Term
| What is the movement of retained earnings? |
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Definition
| Beginning retained earnings balance + Net Income - Dividends = new Retained earnings. |
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Term
| What is the Balance Sheet used for? |
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Definition
| To show assets, liabilities, and stockholders equity at a point in time. |
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Term
| What is the only place dividends appear? |
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Definition
| Statement of Retained Earnings |
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Term
| What accounts are effected in summary statements? |
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Definition
| Revenue, Expense, income summary, dividends |
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Term
| how do you get gross profit? |
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Definition
| Revenue from sales - COGS |
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Term
| COGS under the periodic system? |
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Definition
| Beginning Inventory + purchases of inventory = COGS availbel for sale. Then you subtract ending inventory. COGS. |
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Term
| How do you record purchases to an account? |
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Definition
Debit - Purchases
Credit Accounts payable |
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Term
| How do you record cash purchases of inventory? |
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Definition
Debit Purchases
Credit Cash |
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Term
| To record payment with discount. |
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Definition
Debit Account Payable
Credit Cash
Credit Purchase Discount |
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