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Acct 315 test 3

Acct 315 test 3 - the critical event and title legally...

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Test #3 ch. 6,7 In a statement of cash flows, proceeds from issuing equity securities should be classified as cash inflows from financing activities Cash flows from operating activities can be calculated by appropriately adding to or deducting from net income those items in the income statement that do not affect cash If a company uses the gross method of recording accounts receivable from customers, then sales discounts should be reported as a deduction from sales in the income statement A cash over and cash short account is debited when the petty cash fund proves out short Revenue is recognized at time of sale because realization has occurred, the sale is
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Unformatted text preview: the critical event, and title legally passes from the seller to the buyer Making and collecting loans and disposing of plant, property and equipment are investing activities Under the completed contract method, revenue, cost, and gross profit are recognized at the time the contract is completed The goods or services are exchanged for cash or claims to cash (receivables), revenues are realized Under the cost recovery method of revenue recognition, profit is recognized when the cash received from the sale of the product is greater than the cost of the product The petty cash account is usually credited when the fund is replenished...
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