1 employee discounts must be added to sales if sales

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Financial Analysis with Microsoft Excel
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Chapter 2 / Exercise 2
Financial Analysis with Microsoft Excel
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1. Employee discounts Must be added to sales if sales are recorded net of discounts. 1 2. Inventory error, example NRV less "normal" profit. 5 3. Initial markup Approximates lower of average cost or market. 4 4. Conventional retail method Purchases are unrecorded. 2 5. Floor in LCM approach Original increase in selling price above cost. 3 AACSB: Reflective ThinkingAICPA BB: Critical ThinkingBlooms: UnderstandDifficulty: 1 EasyLearning Objective: 09-01 Understand and apply the lower-of-cost-or-market rule used to value inventories.Learning Objective: 09-03 Estimate ending inventory and cost of goods sold using the retail inventory method; applying the various cost flow methods.Learning Objective: 09-07 Explain the appropriate accounting treatment required when an inventory error is discovered.Topic: Estimate ending inventory and COGS using the retail inventory method, applying the various cost flow methodsTopic: Explain the appropriate accounting treatment required when an inventory error is discoveredTopic: Understand and apply the LCM rule used to value inventory
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Financial Analysis with Microsoft Excel
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Chapter 2 / Exercise 2
Financial Analysis with Microsoft Excel
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83.Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. 1. Dollar-value LIFO retail method Usually impossible to calculate the effect on prior years' financial statements. 4 2. Markdown Requires base year retail to be converted to layer year retail and then to cost. 1 3. NRV Reduction in selling price. 2 4. Change to LIFO from FIFO Deducted from selling price when calculating ceiling. 5 5. Disposal costs Upper limit or ceiling in LCM approach. 3 AACSB: Reflective ThinkingAICPA BB: Critical ThinkingBlooms: UnderstandDifficulty: 1 EasyLearning Objective: 09-01 Understand and apply the lower-of-cost-or-market rule used to value inventories.Learning Objective: 09-03 Estimate ending inventory and cost of goods sold using the retail inventory method; applying the various cost flow methods.Learning Objective: 09-07 Explain the appropriate accounting treatment required when an inventory error is discovered.Topic: Estimate ending inventory and COGS using the retail inventory method, applying the various cost flow methodsTopic: Explain the appropriate accounting treatment required when an inventory error is discoveredTopic: Understand and apply the LCM rule used to value inventory
84.Listed below are 10 terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the correct term. 1. Change to LIFO from FIFO Requires base year retail to be converted to layer year retail and then to cost. 6 2. Change from LIFO Divide cost of goods available for sale by goods available at retail. 10 3. Gross profit method Average cost, LCM. 9 4. Normal spoilage Accounting change requiring retrospective treatment. 2 5. Markdown Not acceptable for the preparation of annual financial statements. 3 6. Dollar-value LIFO retail Ceiling in the determination of market. 7 7. Net realizable value Reduction in selling price below the original selling price. 5 8. Employee

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