UCBUGBA102ATopic05PracticeQuestionsSolns

UCBUGBA102ATopic05PracticeQuestionsSolns - Topic05...

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Topic05 Question 1. Using a short formula, show how the following items are calculated: a. Net sales = Gross sales – Sales adjustments b. Net purchases Gross purchases – Purchase adjustments c. Net cost of purchases = Net purchases + Transportation-In d. Cost of goods available for sale = Beginning inventory + Net cost of purchases e. Cost of goods sold = Cost of goods available for sale – Ending inventory Question 2. In a short sentence, explain the difference between the following concepts: The value of clearly determinable liabilities may be determined based on past events whereas for estimated liabilities they may only be estimated. For an interest-bearing note there is a specified interest rate that the borrower will have to pay whereas for a non-interest-bearing note the lender takes the interest in the form of a discount deducted when the proceeds are advanced to the borrower. c.
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UCBUGBA102ATopic05PracticeQuestionsSolns - Topic05...

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