Exam III Outline
I.
Chapter 6
a. Perpetual Inventory System
i. “Inventory Account used”
1. Buyer Journal Entries
a. Purchase, Freight, Returns
b. Periodic Inventory System – Definition only
c. FOB Shipping Point vs. FOB Destination
i. Consigned Goods
d. Perpetual Inventory System
i. “Inventory & COGS Accounts used”
1. Seller Journal Entries
a. Sale, Returns & Allowances
e. COGS Formula
i. BI + Purchases = Goods Available for Sale (GAS)
ii. GAS – Ending Inventory = COGS, thus
iii. BI + Purchases – Ending Inventory = COGS
f. Discount terminology
i. 5/20, n/60
g. Multiple Step Income Statement
i. Gross Profit vs. Income from operations vs. Net Income
II.
Chapter 7
a. Cost Assumptions – Cost of Goods Sold, Ending Inventory Calculations –
KNOW/UNDERSTAND THE CHARTS!!!
i. FIFO
ii. LIFO
iii. Average Cost
b. COGS Formula (see Chapter 6)
c. Lower of Cost or Market
III.
Chapter 8 – Receivables
a. Accounts Receivable
i. Journal Entries
ii. Balance Sheet Presentation
iii. Write Offs
1. Allowance Method
a. Journal Entries
b. % of Net Credit Sales
b. Speeding up receivables
i. Credit Cards
ii. Factoring
c. Notes Receivable
i. Journal Entries
ii. Creating Note Receivable, Interest Calculation, Repayment of Note and Interest
IV.
Chapter 9 - PP&E and Intangibles
d. PP&E
i. Acquisition/Cost Calculation
1. Valuation and Journal Entry
2. Basket Purchases
3. Capitalization vs Repair Expense
ii. Depreciation
1. Straight Line Calculation
a. Full year
2. Journal Entries for Depreciation
iii. Impairment
1. Definition only
iv. Disposition of PPE Asset
1. Journal Entries
2. Gain vs. Loss
e. Intangibles
i. Types
ii. Journal Entries to record acquisition.
iii. Balance Sheet Presentation for PP&E and Intangibles