accounting exam equations
LIFO COGS - FIFO COGS
(FIFO end inventory-LIFO end inventory) - (FIFO beg, inventory - LIFO beg. inventory)
Average cost method: COGS
(unit x cost) + (unit x cost) / (cost + cost) x units sold
average days to sell inventory
365 / inventory turnover
Weighted average cost per unit
COGAFS / units available
FIFO end purchases
FIFO beg. inventory + purchases - FIFO COGS
FIFO inventory
LIFO Inventory + LIFO reserve
LIFO end purchases
LIFO beg. inventory + purchases - LIFO COGS
LIFO reserve
LIFO inventory - FIFO inventory
LIFO gross profit FIFO gross profit
Revenue - LIFO COGS Revenue - FIFO COGS
Percent Accounts Receivable method
accounts receivable (% total accounts receivable)
Ending inventory
beg inventory + purchases - COGS
Cash collections
beg. balance + net sales - end balance -write offs
Beg. balance of 2nd year
beg. balance of previous year + prior year accounts receivable
Bad debt expense
change in doubtful accounts year 1 -2
Inventory turnover
cost of goods sold / average inventory
end balance
current year accounts receivable + prior year end balance
Percent of sales Method
determine percentage, multiply by the total credit sales to get bad debt expense
change in LIFO
difference between LIFO and FIFO cost of goods sold
allowance for doubtful accounts
doubtful accounts credit balance + bad debt expense - allowance doubtful accounts
Cost of goods available for sale
ending inventory + cost of goods sold
Accounts Receivable
given previous accounts receivable + value on credit - allowance for doubtful accounts - account receivable during current year
Write offs
new allowance- (beg, balance + bad debt)
accounts receivable turnover ratio
new credit sales / average net accounts receivable
Gross profit
revenue - COGS
Bad debt expense
sales (% sales uncollectible)
Freight on board destination
seller owns and is responsible for goods
Freight on board shipping point
seller owns and is responsible for goods
