cheat1 - 6[FIFO reflects a cost flow that is in the order in which the costs were incurred will report the most current prices in ending

cheat1 - 6[FIFO reflects a cost flow that is in the order...

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6:[FIFO reflects a cost flow that is in the order in which the costs were incurred & will report the most current prices in ending inventory.][LIFO -The revers order will report the earliest costs in ending invtry][FIFO Assumes 1st items acquired R 1st items sold, Costs of ending invtry R most recent purch costs. If prices R increasing, incum is higher & vice/ver [ LIFO Assumes last items acquired are first items sold. Cost of goods sold is most recent purch costs, If prices R incrsing, income. is smaller & vice/] Invtry systms employing accting records that continusly disclose the amt of invtry is- Perpetual ]A perid of consistly rising prices, LIFO reports greatest C.O.M.S] A Manufr ships merch 2 a retailer on consign, the unsold merch should b in the invtory of the Manufr .][FOB Ship’n Point-Buyer owns invtry in transit. FOB Dest’n.-Seller owns invtry in transit] Invtry Turnover -Mesrment of the # of times a comp’s Avg. invtry is sold during an accnting period = C.O.M.S / Avg.- Invtry ][Days’ Invtry on Hand : Indicates the avg # of days req’d 2 sell the invtry on hand. = 365 / invtry Turnover 8:Accts Receivable Analis / Accts Receivable Turnover -shows how many times receivables R collected during a year, on avg = Net Sales / Avg Net A/R Dir Write-Off Meth- Dr. Bad Debt Expense, Cr. A/R][ Allow Meth’d= Bad Debt Expns shows on the inc. statement as an operating expen. Allowc 4 Doubtful Accts shows on the Bal sheet as a contra-asset acct that is deducted from A/R- Dr. Bad Debt Exp Cr. Allowce 4 Doubtful Accts ][Allow 4 Doubtful Accts=Allow 4 Uncollectible Accts = Allow 4 Bad Debts / Uncollectible Accts Expnce= Bad Debt Exp] % of Net Sales Meth’d -The Amt is based on the comp’s historic losses] [Analis of Recevabls Meth’d= “How much of the year-end Bal of A/R will not be collected?” The difference between the Amt. determined 2 B uncollectible & the actual BAL of Allow’c 4 Uncollectible Acct’s is the expnce 4 the period. The aging of A/R is the process of listing each cust’s accnt accordin 2 the due date of the

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