# Shared Flashcard Set

## Details

Accounting
Financial Accounting Fundamentals
14
Accounting
04/13/2013

Term
 What is ACID TEST RATIO?
Definition
 Cash and cash equivalents + short trm investments + current receivables/current liabilities
Term
 Gross Margin Ratio
Definition
 Net Sales - Cost of Goods Sold/Net Sales
Term
 HOW TO GET NET SALES
Definition
 SALES - RETURNS AND ALLOWANCES - SALES DISCOUNTS = NET SALES
Term
 Total Cost Of Merchandise Purchased
Definition
 Invoice cost of Merch Purchases - purchased discounts received - Purchase returns and allowances + cost of transportation in
Term
 What is the title on a Multiple step Income Statement
Definition
 Company name, Income statement, and "For Year Ended" month/date/year.
Term
 What is on a Multiple Step Income Statement
Definition
 The statement has three main parts: (1) gross profit, determined by net sales less cost of goods sold, (2) income from operations, determined by gross profit less operating expenses, and (3) net income, determined by income from operations adjusted for nonoperating items. i.e interest revenue, sale from building, (less interest expense).
Term
 How to get Cost Of Goods Sold
Definition
 Beginning Inventory + Purchases = COGS
Term
 How to get Units Available For Sale
Definition
 Add up all units Beginning Inventory and all purchases
Term
 How to get Ending Inventory
Definition
 Total units purchased - total units sold
Term
 Gross Profit
Definition
 COGS - Sales = Gross Profit
Term
 Relative market value of "lump some purchase" equation
Definition
 appraisal/(land appraisal + Land Improvements appraisal)* purchase price = land cost (recorded)
Term
 Double Declining Method
Definition
 2 * Straight-line reate = double decline rate I.E (2 * 20% = 40% SO.. 40% *10,000 = 4,000 <---Depreciation expense
Term
 Depreciation per unit
Definition
 cost - salvage value/total units of product = Depreciation per unitDepreciation per unit * units produced in period
Term
 Straight line Depreciation
Definition
 Cost - Salvage Value / Useful life = per year depreciation
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