Could anybody please answer these study guide points?
Chapter 5 Receivables & Revenue 1. Revenue Recognition a. General rule of when to recognize revenue and in what amount. b. Understand the difference between FOB shipping and FOB destination. c. Understand how sales terms are described (e.g., 2/10 net 30 or 1/15 net 40, etc.) d. Know how to record the following: Sales Revenue for credit card transactions Sales Revenue made on account with terms that include a Sales Discount for early payment Sales Returns & Allowance transactions. 2. Bad Debt Expense Recognition a. Know the difference between the direct write-off method and allowance method for bad debt. Adjusting entry to record Allowance for Bad Debt (under the Allowance Method). Write-off of an account receivable (under the Allowance Method). 3. Notes Receivable a. Adjusting entry to record interest revenue/receivable. Chapter 6 - Inventory 1. Cost of Goods Sold: a. Know the types of costs allocated to Inventory b. Know how to calculate Cost of Goods sold, using the following method: Beginning Inventory + Purchases - Purchase Returns & Allowance - Purchase Discounts + Freight-In = Cost of Goods Available for Sale - Ending Inventory = Cost of Goods Sold c. Know how to record the following transactions using the perpetual method: Sales Transactions Purchases of Inventory (including Freight-In) Purchase Discounts Purchase Returns & Allowance transactions. 2. Cost Flow Assumptions a. Know how to calculate Cost of Goods Sold and Ending Inventory using the following Cost flow Assumptions: FIFO (First in, First out) LIFO (Last in, First out) Weighted Average b. Know the impact of cost flow assumptions (e.g., FIFO vs LIFO) during periods of inflation (rising costs) on the following: . Cost of goods sold and net income Income Tax Expense Ending Inventory c. Know the impact of cost flow assumptions (e.g., FIFO vs LIFO) during periods of deflation (decreasing costs) on the following: Cost of goods sold and net income Income Tax Expense Ending Inventory 3. Lower of Cost or Market a. Know the general rule and how Market should be defined (i.e., as current replacement cost) b. Know how to record the journal entry to write down inventory to Market 4. Inventory Ratios a. Know how to calculate and interpret the following: Inventory Turnover Days Sales in Inventory . Gross Profit Ratio Chapter 7 Long-term Assets 1. General a. Know what gets included in the major categories of Long-Term Assets: Plant Property & Equipment (PP&E) Intangibles 2. Know when to capitalize vs expense expenditures on Assets after acquisition 3. Know how to calculate and record the following journal entries: a. Straight-line depreciation of PP&E b. A change in the estimated useful life made after depreciation has already begun c. Sale or Disposal of PP&E d. Amortization of Intangibles e. Impairment of an asset Chapter 8 - Current Liabilities 1. General a. Know the difference between current and long-term liabilities b. How to reflect debt that has both a current and long-term portion 2. Adjusting Entries related to liabilities a. Know how to record the following typical adjusting entries Deferred Revenue . Interest Expense and Interest Payable 3. Contingent liabilities a. Know the definition of a contingent liability b. Know the rules for when a contingent liability should be recorded and/or disclosed c. Know journal entry to record a contingent liability and the associated loss d. Be familiar with warranties and how to record estimated warranty liability and expense 4. Know how to calculate and interpret the following ratios: a. Working Capital b. Current Ratio c. Acid-Test Ratio Chapter 5 Receivables & Revenue 1. Revenue Recognition a. General rule of when to recognize revenue and in what amount. b. Understand the difference between FOB shipping and FOB destination. c. Understand how sales terms are described (e.g., 2/10 net 30 or 1/15 net 40, etc.) d. Know how to record the following: Sales Revenue for credit card transactions Sales Revenue made on account with terms that include a Sales Discount for early payment Sales Returns & Allowance transactions. 2. Bad Debt Expense Recognition a. Know the difference between the direct write-off method and allowance method for bad debt. Adjusting entry to record Allowance for Bad Debt (under the Allowance Method). Write-off of an account receivable (under the Allowance Method). 3. Notes Receivable a. Adjusting entry to record interest revenue/receivable. Chapter 6 - Inventory 1. Cost of Goods Sold: a. Know the types of costs allocated to Inventory b. Know how to calculate Cost of Goods sold, using the following method: Beginning Inventory + Purchases - Purchase Returns & Allowance - Purchase Discounts + Freight-In = Cost of Goods Available for Sale - Ending Inventory = Cost of Goods Sold c. Know how to record the following transactions using the perpetual method: Sales Transactions Purchases of Inventory (including Freight-In) Purchase Discounts Purchase Returns & Allowance transactions. 2. Cost Flow Assumptions a. Know how to calculate Cost of Goods Sold and Ending Inventory using the following Cost flow Assumptions: FIFO (First in, First out) LIFO (Last in, First out) Weighted Average b. Know the impact of cost flow assumptions (e.g., FIFO vs LIFO) during periods of inflation (rising costs) on the following: . Cost of goods sold and net income Income Tax Expense Ending Inventory c. Know the impact of cost flow assumptions (e.g., FIFO vs LIFO) during periods of deflation (decreasing costs) on the following: Cost of goods sold and net income Income Tax Expense Ending Inventory 3. Lower of Cost or Market a. Know the general rule and how Market should be defined (i.e., as current replacement cost) b. Know how to record the journal entry to write down inventory to Market 4. Inventory Ratios a. Know how to calculate and interpret the following: Inventory Turnover Days Sales in Inventory . Gross Profit Ratio Chapter 7 Long-term Assets 1. General a. Know what gets included in the major categories of Long-Term Assets: Plant Property & Equipment (PP&E) Intangibles 2. Know when to capitalize vs expense expenditures on Assets after acquisition 3. Know how to calculate and record the following journal entries: a. Straight-line depreciation of PP&E b. A change in the estimated useful life made after depreciation has already begun c. Sale or Disposal of PP&E d. Amortization of Intangibles e. Impairment of an asset Chapter 8 - Current Liabilities 1. General a. Know the difference between current and long-term liabilities b. How to reflect debt that has both a current and long-term portion 2. Adjusting Entries related to liabilities a. Know how to record the following typical adjusting entries Deferred Revenue . Interest Expense and Interest Payable 3. Contingent liabilities a. Know the definition of a contingent liability b. Know the rules for when a contingent liability should be recorded and/or disclosed c. Know journal entry to record a contingent liability and the associated loss d. Be familiar with warranties and how to record estimated warranty liability and expense 4. Know how to calculate and interpret the following ratios: a. Working Capital b. Current Ratio c. Acid-Test Ratio
