Ch 5 Accounting For Merchandising Operations

Electric funds transfer – A computerized ash payments system that transfers funds without the use of checks, currency, or other paper document
why is accounting called a double entry accounting system? – because a minimum of TWO items must always change with each transaction
proprietorship – A business owned by one person.
Iclicker Posting is the process of – Transferring the debit and credit into from the journal of individuals…
Pre payments – They remain assets until they run out
Prepaid expenses will:
A) become liabilities when their future benefits expire
B) become expenses when their future benefits expire
C) become revenues when their future benefits expire
D) become none of the above – B) become expenses when their future benefits expire.
A favorable fixed overhead flexible-budget variance indicates that actual fixed costs exceeded the lump-sum amount budgeted. – False
liquidity – assets are displayed on the balance sheet based on this level, listed in order of how rapidly they will be converted to cash
Managed care was primarily introduced to:
In what area can a company be profitable in but at the same time show a loss? – A company's operations can be very profitable but their non-operating expenses can still be larger than their operations, resulting in a loss.
FREE ON BOARD (FOB) – THE PURCHASE AGREEMENT SPECIFIES FOB TERMS TO INDICATE WHO PAYS THE FREIGHT. FOB TERMS ALSO DETERMINE WHEN TITLE TO THE GOODS TRANSFER TO THE PURCHASER
the use of ethics in making business decisions – business ethics
Accounting – Planning, recording, analyzing, and interpreting financial information
Cost of goods available for sale is computed by adding
A. inventory to ending inventory.
B. beginning inventory to the cost of goods purchased.
C. purchases and freight-in.
D. purchases to purchases discounts and freight-in. – B
Mаnаged cаre was primarily intrоduced tо:
Sunk cost – any costs that has already been incurred and cannot be changed by any decision made now or in the future
Identify each item with its appropriate financial statement: Income Statement (IS), Statement of retained earnings (SRE), Balance Sheet (BS), Statement of Cash Flows (SCF)
*3 items appear on 2 financial statements, and 1 item shows up on 3 statements.

a. Dividends
b. Salary Expense
c. Inventory
d. Sales revenue
e. Retained Earnings
f. Net cash provided by operating activities
g. Net income
h. Cash
i. Net cash used for financing activities
j. Accounts Payable
k. Common Stock
l. Interest Revenue
m. Long-Term debt
n. Increase or decrease in cash – a. SCF, SRE
b. IS
c. BS
d. IS
e. BS, SRE
f. SCF
g. SCF, IS, SRE
h. BS, SCF
i. SCF
j. BS
k. BS
l, IS
m. BS
n. SCF

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