MGMT 30A Study Guide - Midterm Guide: Inventory Turnover, Rec 2, Financial Statement
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MGMT 30A Full Course Notes
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Chapter 5 db = debit, cr = credit. Ownership of the goods remains with the seller and passes to the buyer when the goods reach the buyer. Fob shipping point: buyer pays the freight costs. Ownership of goods passes to the buyer when the public carrier accepts the goods from the seller. Purchases returns and allowances - debit accts pay, credit inventory or purchases r & a. If there is a purchase discount, we db accts pay (total), cr inventory (discount) & cr cash. Goods in transit: purchased goods not yet received, sold goods not yet delivered. Should be included in the inventory of the buyer when the terms are fob shipping point. Consigned goods are not part of the inventory. Fifo is 45%, lifo 24%, average cost 16%, other 15% Cost of goods sold = (beginning inventory + purchases) ending inventory. Sale - cash or accts rec debit, sales revenue credit. & cost of good sold debit, inventory credit.
