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Exam 2 review(no ch7)

Exam 2 review(no ch7) - o Direct write off vs the allowance...

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Cal Poly State University, SLO Orfalea College of Business BUS 214 Michelle Bissonnette Review Exam 2 Ch 5, 6 & 8 Chapter 5 Merchandising Operations and the Multi-Step Income Statement o Periodic vs. perpetual inventory systems o Recording sales of merchandise o Income statement presentation-multistep format vs. single step o Ch 5 ratios: gross profit & profit margin ratios Chapter 6 Inventory o Importance of valuing inventory correctly o Calculation of Cost of Goods Sold for periodic inventory o Inventory Costing Systems - FIFO LIFO Weighted Average Specific Identification o Computations of Ending Inventory and Cost of Goods Sold using the cost flow assumptions o Effect of differing costing methods on the balance sheet and the income statements o Which method is preferable under differing circumstances? o Valuation of Inventory using Lower of Cost or Market o Disclosure requirements for inventory Chapter 8 Accounts Receivable o Difference between accounts receivable and notes receivable
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Unformatted text preview: o Direct write off vs. the allowance method. Which is preferred and why? o Advantages and disadvantages of both methods o What is the allowance method? o What are the two GAAP methods available ? % sales and % receivables (aging) o Journal entries related to accounts receivable activity o How do you estimate the allowance using both methods? o How do you estimate bad debt expense using the two methods? o What are the balance sheet and income statement effects of the two methods? o Which method is preferred and why? Work the Demonstration problems at the end of the Chapters for additional practice. Also the “B” problems are very similar to the “A” problems. Work the “B” problems that correlate to the “A” problems assigned and vice versa. I highly recommend working extra problems in each chapter since there was a limited amount of homework covered in class. I can help with suggestions....
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