prax upload-1

prax upload-1 - Some Final Exam Prep Dangerously simple...

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Some Final Exam Prep Dangerously simple arithmetic. Diagrams will really help. Most solutions come by parts; answers won’t pop-into  your head. Accounting is primarily about “earnings” – not Cash Flow. 
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CASH  RECEIVABLES PREPAID  EXPENSES   GOODWILL   RETAINED EARNINGS NOTES PAYABLE DEFERRED TAXES ACCRUED EXPENSES DECLARED DIVIDENDS Add some additional Accounts
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  NI + Beg  Ret. Earnings –  End  Retained Earnings =  Divs Beg  Inv + Purchases –  End  Inv =  COGS ∆(Inventory) + Purchases =  COGS
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   Slightly more complicated Expenses (not incl. COGS) + ∆Prepaid Expense – ∆ Accrued Expenses    Cash-paid for Expenses Sales + ∆Receivables – ∆Unearned Revenue     Cash-received from Customers
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                                                                                0 0 0 50 0 (0)  0  0  0  0  50    0   100   0   0   0   0 (0)  0  0  0   0 50 50 Cash Paid for Expenses? Nothing ! 100 (0)   100 (50)  50
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A Company uses a 100% wholesale-to-retail mark-up, i.e.  it enjoys a 50 percent gross profit margin.  If the Company  offers a “buy one get a second for ½ price”, what will  happen to its gross profits? Sales  = 2xCOGS$ 10  $ 15 COGS ($ 5) ($10) GP = 0.5xSales    $5    $ 5
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Expenses –  dividends are not  an expense DIRECT INDIRECT PERIODIC COGS ADVERTISING INSURANCE Commissions TRAVEL Rent TAXES Salaries Wages
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Aggressive vs. Conservative Aggressive Exaggerates revenue and  discounts expenses. Counts revenue if cash  collection merely  possible. Ignores expenses, unless 
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This note was uploaded on 02/27/2009 for the course ECON econ 4 taught by Professor Willoughby during the Spring '09 term at UCSD.

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prax upload-1 - Some Final Exam Prep Dangerously simple...

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