Income Statement Preparation and Analysis
Contra Revenue accounts
Accounts that reduce gross sales revenue
Credit Terms
Agreed payment conditions between buyer and seller
Accounts Receivable
Amounts owed by customers for credit sales
Inventory Turnover Ratio
COGS divided by average inventory
Perpetual Inventory Method
Continuous tracking of inventory levels
COGAFS
Cost of Goods Available for Sale
COGS
Cost of goods sold; expense account
Allowance for Doubtful Accounts
Estimated uncollectible accounts
FIFO
First in First Out inventory method
LIFO
Last in First Out inventory method
Bank Reconciliations
Matching bank statement with company records
Fraud Triangle
Model for explaining fraud motivations
Days in Inventory
Number of days inventory is held
FOB Shipping Point
Ownership transfers to buyer at shipment
Gross Profit Rate
Ratio of gross profit to net sales
Sarbanes-Oxley Act
Regulation for corporate governance and reporting
Petty Cash Fund
Small fund for minor expenses
Actual Cost Flow
Specific identification of costs
Income Summary
Temporary account for closing entries
Cost of Goods Purchased
Total cost of goods acquired in a period
Net Sales
Total sales minus sales returns and allowances
Notes Receivable
Written promise for future payment
