ACG 2021

1. ACG 2021 Review for Test Two

2. Chapter 4 • Merchandise business • Merchandise inventory • Asset account • Cost of goods sold • Expense account • Sales • Revenue account • Sales discount • Expense account • Sales returns • Contra revenue account

3. Cost of goods sold • Beginning inventory • +Purchases • = Total available • - Ending inventory • = Cost of goods sold • Sales – COGS = Gross profit

4. Transactions • Purchase of merchandise • Merchandise inventory • Accounts payable • Return of merchandise purchased • Accounts payable • Merchandise inventory • Payment within discount • Accounts payable • Merchandise inventory • Cash

5. Transactions • Sales • Accounts receivable • Sales • Cost of goods sold • Merchandise inventory • Sales returns • Sales returns • Accounts receivable • Merchandise inventory • Cost of goods sold

6. Transactions • Sales discount • Cash • Sales discount • Accounts receivable

7. Chapter 5 • Perpetual inventory systems • Effect of incorrect inventory values • Specific identification • FIFO • LIFO • Lower of cost or market

8. Chapter 6 • Internal controls • What is control environment? • Cash short and over • Expense or revenue account depending on balance at end of year • Cash short • Debit cash short and over for difference • Cash over • Credit cash short and over for difference

9. Chapter 6 • Petty Cash • Asset account • Reflects original investment in account • Reimbursement • Expenses are debited • Cash credited

10. Chapter 6 • Bank reconciliation • Outstanding checks • Outstanding deposits • NSF checks • Service charge

11. Chapter 6 • Entries for bank reconciliation • NSF check • Accounts receivable • Cash • Service charge • Bank charges • Cash • Note collected • Cash • Interest income • Notes receivable