MGT 11A Lecture 5: MGT11A - Lecture 5 - Chapter 4
Document Summary
Mgt11a elementary financial accounting fall 2018 notes & Finals: thu, dec 13 (1:00 p. m. - 3:00 p. m. ) Inventory equation = (beginning inventory + additions) end inventory = cost of goods sold. If cost of goods sold is understated then net income is overstated. Periodi(cid:272) a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g syste(cid:373), (cid:374)u(cid:373)(cid:271)ers do(cid:374)"t (cid:272)ha(cid:374)ge u(cid:374)til (cid:272)losi(cid:374)g or (cid:272)ertai(cid:374) periods. Has accounts: purchase, purchase return + allowances, purchase discount. Perpetual accounting, changes as things come in and out. Purchases purchase returns and allowances purchase discounts = net purchases + Sales revenue sales returns and allowances sales discount = net sales. 2% discount if paid in ten days, full value must be paid by the thirtieth day. Income statement: gross revenue sales return and allowances sales discounts = net sales revenue. Revenue cost of goods sold = gross profit operating expenses = net income. Transportation cost transportation in or transportation out. Fob shipping point or fob destination merchandise enters transportation merchandise arrives at their warehouse/store.
