Financial Accounting Basics Cheat Sheet, Cheat Sheet of Financial Accounting

Download Financial Accounting Basics Cheat Sheet and more Cheat Sheet Financial Accounting in PDF only on Docsity! ACC 201 Cheat Sheet by kmell Inventory Management Decisions Primary goals of management decisions: 1. Maintain sufficient quantity to meet customer needs 2. Ensure quality meets customers expectations 3. Minimize costs of getting/carrying inventory Reporting Inventory Income Statement: once items are sold, you remove cost of goods sold from income statement Balance Sheet: inventory is set up as an asset when purchased Percentage of Credit Sales v Aging of A/R % (income statement method) easier to compute; aging (balance sheet method) is more accurate income statement method: begin by writing journal entries in problem balance sheet method: begin by making a chart STEPS TO FIFO/LIFO/WEIGHTED AVERAGE FIFO LIFO WEIGHTED AVERAGE STEP 1: begin by doing COGA. STEP 2: when determining COGS, remember to do FIRST-IN-- FIRST-OUT STEP 1: SAME AS FIFO STEP 2. REMEMBER TO DO LAST-IN-F- IRST-OUT STEP 1: SAME AS FIFO AND LIFO STEP 2: DIVIDE COGA BY NUMBER OF UNITS AVAILABLE STEP 3. USE THE NUMBER TO FIND COGS AND COST OF ENDING INVENTORY Sales Transactions FOB Shipping Point FOB Destination FOB Shipping: sale recorded when goods leave seller's shipping department FOB Destination: sale recorded when goods reach destination FORMULAS COGS = COGA - EI COGA = BI + PURCHASES GROSS PROFIT = SALES - COGS INTEREST = PRINCIPAL X INTEREST RATE X TIME NET RELIZABLE VALUE: A/R TOTAL - ALLOWANCE TOTAL Types of Inventory Merchandisers Manufacturers Merchandisers: buy + sell finished goods Manufacturers: buy raw materials + produce and sell finished goods (raw materials, work in process, and finished goods)