Shared Flashcard Set

Details

BUA 201
Accounting Prof. Criner
25
Accounting
Undergraduate 1
10/22/2007

Additional Accounting Flashcards

 


 

Cards

Term

Product Cost

Definition
inventory costs such as price of goods purchased, shipping and handling costs, transit insurance, and storage costs
Term

Period costs

Definition
expenses in which they are incurred

aka selling and administrative costs
Term
selling and administrative costs
Definition

costs that are not included in inventory


examples: advertising, administrative salaries, sales commissions, insurance, and interest

Term
gross margin aka gross profit (equation is?)
Definition

sales - costs of goods sold = gross profit

Term
perpetual inventory system
Definition
inventory account is increased when merchandise is purchased
each time merchandise is sold, inventory account is decreased
Term
FOB shipping point vs. FOB destination
Definition
FOB shipping point - buyer responsible for transportation costs (aka trans. in)

FOB destination - seller responsible for transportation costs (aka trans out)
Term
multistep income statement
Definition
income statemenst that show additional relationships such as gains and losses, interest revenue, and interest expense
Term
single-step income statements
Definition
income statements that display a single comparison of total revenues and total expenses
Term
gross margin percentage
Definition

gross margin
net sales



company with higher gross margin percentage is pricing its products higher

Term

return on sales

Definition
net income
net sales



-net income expressed as percentage of sales provides insight as to how much of each sales dollar is left as net income after all expenses are paid


-company with HIGHER return on sales ratio is doing a better job of controlling expenses
Term

net realizable value

Definition
how much cash company receives from selling inventory
Term
Cost of goods available for sale equation?
Definition
   beginning inventory
+ purchases             
    cost of goods available for sale 
Term
primary
Definition
actually buy stocks from company
Term
secondary stock
Definition
after stock goes onto market and is sold and resold, it's secondary
Term
market value
Definition
selling price
Term
FIFO, LIFO, Weighted Average
Definition
1. Determine cost of inventory (use one of the 3 choices)

2. Apply lower of cost or market rule

3. Apply net realizable value rule
Term
current
Definition
one year of operating cycle
Term
current asset
Definition
any asset that can be converted to cash (normally) within a year
Term
liquidity
Definition
listed in order of their liquidity
Term

current ratio

Definition
current assets
current liabilities
Term
current liability
Definition
debt due within a year
Term
solvency ratio
Definition
ability to pay debt long term

debt/asset ratio - want a low percent
Term
current assets (examples)
Definition

cash
marketable securities
accounts receivable
short-term notes receivable
interest receivable
inventory
supplies
prepaids

Term
noncurrent assets (examples)
Definition
property
land
equipment
Term
current liabilities
Definition
accounts payable
unearned revenues
short-term notes payable
wages payable
taxes payable
interest payable
current portion of long term debt
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