ACC 211 Final Review

what is the formula for gross margin ratio?

(Net Sales - Cost of Goods Sold) / Net Sales

how to calculate a company's acid-test ratio for year 2:

(cash + short-term investments + accounts receivable, net)/accounts payable

what is the formula for depreciation expense?

(cost-salvage value)/estimated useful life x length of ownership

what is the formula for basic earnings per share?

(net income-preferred dividends)/weighted average common shares outstanding

on july 1 of the current calendar year, olive company paid $8,100 cash for management services to be performed over a two-year period beginning july 1. the adjusting entry on december 31 of the current year for olive would include:

a debit to expense and credit to a prepaid expense for $2,025

what is the formula for days' sales uncollected ratio?

accounts receivable/net sales x 365

how to calculate revenue for a month:

add: 1. received $1,070 for cash services provided to a customer during july 4. provided services to a customer on credit, $545

Saddleback Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

assets decrease $30,000; liabilities decrease $30,000

how to calculate adjusted bank balance:

bank balance + deposit in transit - outstanding checks +/- bank error

what is the formula for ending cash balance?

beginning cash balance+cash receipts-cash payments

how to calculate cash dividend paid:

cash dividend declared + cash dividend payable, beginning - less cash divided payable, ending

what is the formula for cash flow on total assets ratio?

cash flows from operations/average total assets

what is the formula for inventory turnover?

cost of goods sold/average inventory

what is the formula for amortization expense?

cost/lesser estimated useful life or length of remaining lease

do you debit or credit cash to replenish a petty cash fund?

credit cash

On may 1, a customer paid greenlawn $74,000 for 6 months services in advance. greenlawn's journal entry to record this transaction will include a:

credit to unearned revenue for $74,000

on april 12, hong company agrees to accept a 60-day, 10%, $5,000 note from indigo company to extend the due date on an overdue account payable. what is the journal entry made by indigo company to record the transaction?

debit accounts payable $5,000; credit notes payable $5,000

Springfield Company offers a bonus plan to its employees and the amount of the employee bonuses for the current year is estimated to be $32,500 to be paid during January of the following year. The journal entry on December 31 to record the bonuses is:

debit employee bonus expense $32,500; credit bonus payable $32,500

a company purchased $800 of supplies on credit. what would the journal entry be for this transaction?

debit supplies $800; credit accounts payable $800

a company purchased $21,600 of supplies on credit. the journal entry to record this transaction consists of a:

debit supplies for $21,600; credit accounts payable for $21,600

what is the formula for price earnings ratio?

market price per share (net income/weighted-average common shares outstanding)/earnings per share

how to calculate net cash used by operations:

net income + depreciation expense - gain on sale of land -increase in merchandise inventory + increase in accounts payable

what is the formula for return on assets?

net income/average total assets (revenues-expenses)

what is the formula for profit margin?

net income/net sales

what is the formula for accounts receivable turnover?

net sales/average accounts receivable

what is the formula for total asset turnover?

net sales/average total assets

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

one asset increases $1,300 and another asset decreases $1,300, causing no effect

what is the formula for acid-test ratio?

quick assets/current liabilities

what is the formula for net income?

revenues-expenses

If a check correctly written and paid by the bank for $282 is incorrectly recorded on the company's books for $236, the appropriate treatment on the bank reconciliation would be to:

subtract $46 from the book balance

what is the formula for debt ratio?

total liabilities/total assets

what is the formula for debt-to-equity ratio?

total liabilities/total equity