ACC 101 Chapter 6 Test Notes

ACC 101 Chapter 6 Test Notes - CHAPTER 6 Operating Cycles...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 6 Operating Cycles Sell services -->Receive cash --> incur operating expenses --> Sell Services Sell products --> Receive cash -->Incur operating expenses -->Buy products --> Sell Products Sell Products --> Receive cash -->Incur operating expenses -->Buy raw materials --> Make products --> Sell Products Inferring Shrinkage (example) Beginning Inventory…………………………………………………… $3,167 seller's shipping dept. + Purchases…………………………………………………………… $11,474 - Cost of Goods of sold………………………………………………… $(11,405) customer at their Ending Inventory, prior to shrinkage adjustment…………………… $3,236 destination point Ending inv., as reported (after shrinkage adjustment)……………… $3,234 Shrinkage………………………………………………………………… $2 pays for shipping costs which increases inventory Inventory Cost (example) Inventory Cost = $2,600 (purchase) + 165 (freight-in) = $2765 debit credit Debit Credit Inventory (+A) 300 Jan. 6 Inventory (+A) 1200 Cash (-A) 300 Accounts Payable (+L) 1200 Purchases on Account:
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/14/2012 for the course ACC 101 taught by Professor Mandau during the Spring '10 term at Piedmont TC.

Ask a homework question - tutors are online