Test 2 Study Guide

Test 2 Study Guide - Accounting 211 Study Guide-Test 2...

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Accounting 211 Study Guide—Test 2 – October 26, 2007 1. Know the multiple-step income statement similar to the one from problem 1 in Chapter 5. Study the various steps and sections. Tax expense is a separate section in the income statement of corporations. The multiple-step income statement of a merchandiser reports sales, sales returns and allowances, sales discounts, and net sales. 2. Know how to calculate gross profit (also called gross margin or gross profit margin). Net Sales minus the Cost of Merchandise Sold. 3. Be able to calculate Cost of Merchandise Sold (also called Cost of Goods Sold or Cost of Sales). The Cost of Merchandise Sold is a major expense for retailers. Beginning Inventory plus total net delivered cost of Purchases minus Ending Inventory. 4. Know how to calculate net sales and net purchases, considering returns and discounts. Net Sales = Revenue received for merchandise sold to customers minus any sales returns and allowances and sales discounts. 5. Know general journal form entries (debits and credits in journal form) for basic sales, inventory purchases, and cost of merchandise sold events. Basic Sales – Credit Sales
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Test 2 Study Guide - Accounting 211 Study Guide-Test 2...

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