Busi 293 Section 101
Practice Final Exam Questions
a) Identify the inventory costing method that relates to the following statements
assuming a period of rising prices: (4 marks)
i) Matches recent costs with revenue
Commerce 293: Introductory Financial Accounting
Purpose / rationale for the course.
To develop an understanding of how to prepare and interpret the financial statements by
which entities report their results to external users.
Thursday, September 11, 2014
Buying and Selling of goods.
Your company had the following merchandising transactions (perpetual system):
- company will record all sales and purchases of inven
Revenue Recognition- important!
When to recognize revenue and expenses for shareholders to see how much weve made for
Risks and rewards of ownership have been transferred to the buyer
The seller does not manage the asset or have any control over it
Monday, September 22, 2014
Reporting and Interpreting Cost of Goods Sold and
ex. Sell radios
Gross margin 4
buy a total of 16 radios on credit
sell a total of 9 radios on credit
Thursday, October 16, 2014
Sales and Property Tax
Sell a tennis racket to a customer for $100 plus tax (cash) (ignore inventory):
GST 5% and PST 7%
Sales Taxes Payable
To remit taxes to the government:
Tuesday, September 9, 2014
Intro to Accounting
- Assets (Debits)
- Current (disappear or go into cash within one year)
- receivables are assets companies owe us we hope to get cash from
- Non-current - will not receive ca
FA is like a language that must be understood by everyone
Publicly traded companies must use IFRS
Private companies can either use IFRS or ASPE
- IFRS- international nancial reporting standards
- ASPE- accounting standards for private enterpr
Activities companies take on to generate revenue day to day.
A. Delivery service for $1000 on account (pay later).
- results in an accounts receivable debit of $1,000
- because no other asset is decreased or liability increased t
Tuesday, September 9, 2014
Assets = Liabilities + Equity
Assets- company owns e.g. factory, equipment, inventory, goods for sale, cash.
- have future value
Liability- company owes to outside interest e.g. bank or interest
Wednesday, September 10, 2014
Accruals and Deferrals
Accruals and deferrals are used to record revenue.
- done at the point where we have done work (earned the revenue).
Scenario 1: Lee designed a Building A which the client paid $25,00
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12,333 out oi a total of 25,333 kilometres. lvaona paid for all the opeeadug expenses of the
vehicle which amounted to $4533.
Remonahle allowance rates ior 1315b
Nari Inc offers $3.33 per
Absorption and Variable Costing
As the CEO of Sportacle, you are considering whether to use variable oosting. Here are some
decisions you will have to ntalce.
unl'ben should Sportacle
use absorption costing?
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IWhat happens if they do not have exactly #595 units they can "sacrifice" or forfeit. They sell to a wide range of
retailers so it might be possible.
If sales grow then they would incur a greater opportunity cost because more capacity woul
Wednesday, October 1, 2014
A/R Journal Entries
Debit to accounts receivable means the customer may not pay.
Total sales for the year were $500,000. Cash sales for the year were $100,000