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REVIEW_FOR_MIDTERM_2 - IMPORTANT This list in not all...

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IMPORTANT: This list in not all inclusive!!!  We don’t know what is on the test; this is just an  overview of the key topics in each chapter.   REVIEW FOR MIDTERM #2: *Review Chapters *Review Notes **Review Homework CHAPTER EIGHT: Inventory Relationship: Beg. Inventory Plus: Net Purchases Cost of Goods Available for Sale End. Inventory Cost of Goods Sold Net Purchases = Gross Purchases – Purchase Discounts – Purchase Returns + Freight In Know different types of Inventory: (Manufacturing vs. Merchandising) Costs Included in Inventory: (Manufacturing vs. Merchandising) Pros and Cons to High Inventory Levels Inventory Ownership: Free On Board (FOB) – Shipping Point (Buyer bears shipping costs) Free On Board (FOB) – Destination Point (Seller bears shipping costs) Perpetual Inventory System Periodic Inventory System** Purchase Made Purchase Made Inventory XXX Purchases XXX Accounts Payable XXX Accounts Payable XXX Sale Is Made Sale Is Made Accounts Receivable XXX Accounts Receivable XXX Sales Revenue XXX Sales Revenue XXX COGS XXX Inventory XXX Closing Entry (end of period) Inventory XXX Purchases XXX COGS (for the entire period) XXX Inventory XXX **(For LIFO, FIFO, Concentrate on Periodic Method) Look at Perpetual vs. Periodic Comparison (Ex. You can find Shrinkage or Theft, etc with Perpetual) Inventory Errors **Inventory Cost Flow Assumptions: Specific Identification Average Cost LIFO FIFO (Go through plenty of examples and homework problems) (Know the Effects of each Cost Flow Assumption on COGS, Ending Inventory, and Net Income - If prices are rising OR falling, etc.) Inventory Ratios Lower of Cost or Market Concept CHAPTER NINE: Do not spend much time on this chapter. But look through your notes and review the homework.
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CHAPTER TEN: Costs included in Fixed Assets (like Inventory) Accounting for the acquisition of PP&E Purchases Operating Leases Capital Leases (Also in Chapter 11)
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