ACG 301 --- Exam #3
Review
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Chapter 7
Cash – what is cash? What is considered cash
on the balance sheet?
Receivables – what are receivables? Trade vs.
nontrade receivables?
AR – valuation? Trade discount? Sales
Discount? Know how to compute a sales
discount.
Uncollectible AR – Direct write-off method vs.
Allowance method? What is the difference?
Which is preferred by FASB? Why?
% of sales vs. % of receivables method? How
do they differ? What is aging of AR?
What is net realizable value?
Allowance method for uncollectible accounts?
Journal entry? What if collect a previously
uncollectible account?
Notes receivable
Notes issued at Face Value
Notes not issued at face value
Notes received for property of service
Disposition of Receivables – secured borrowing
vs. selling receivables? What the difference?
Selling with recourse … Selling without
recourse
AR Turnover – what does it tell us? How to
compute?
Chapter 9
Lower of cost or market – how does it work?
Computing ceiling and floor? Replacement
cost?
Recording inventory at market … Journal entry
for Loss, Use of Allowance account
Relative Sales Value method – how to
compute? When to use?
Purchase Commitments
Gross Profit Method – estimating inventory …
when do you do it? How do you employ this
method? Gross Profit on cost used to calculate
Gross Profit on sales .. how to compute?
Retail Inventory method (Conventional
Method) – when do you use? How do you
compute?
Presentation of inventories
Analysis … Inventory Turnover? Whay does
this tell us? How do you compute?
IFRS rules for inventory
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Chapter 8
Classification of inventory – retailer vs.
manufacturer?
Perpetual system vs. Periodic system? Know
differences.
Valuation issues – what is included in
inventory? Goods in transit? Consigned
goods?
Inventory errors – effect of inventory errors on
COGS, Net Income?
Product costs? Period costs? Purchase
discounts?
Cost flow assumptions – FIFO, LIFO,
Weighted average, Specific identification
LIFO Reserve, LIFO liquidation
Dollar Value LIFO – how does it work?
Advantages and disadvantages of LIFO
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Format
20 multiple choice
2 problems
You need: calculator, #2 pencil
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