241 Test 2 Review

Does the perpetual or periodic inventory system constantly update Inventory by recording COGS after every sale transaction?

• Perpetual

• Periodic

T/F: the post closing trial balance shows that all the closing entries have been posted correctly

• True

• False

T/F: the post closing trial balance proves that all transactions have been recorded accurately and completely

• True

• False

How do we find Net Sales?

• Sales - sales discounts - sales returns and allowances

• Sales - COGS

• Sales - Expenses

• Sales - Income from Operations

How do we find gross profit?

• Sales - discounts - returns and allowances

• Sales - expenses

• Net sales - COGS

• Net Sales - Income Tax

What accounts are NOT included in current assets?

• Cash & A/R

• Prepaid Assets & Cash

• Inventory & A/R

• Goodwill & Land

What accounts are closed into Retained Earnings?

• Revenue, Gains, Sales

• Expenses, Loss, COGS

• Dividends & Income Summary

• Sales, Expenses, Gain

How do we find total PPE?

• Add all property, plant, and equipment

• Add all assets

• Add only land accounts

• Add all property plant and equipment AND subtract accumulated depreciation

What is the normal balance of Sales returns and allowance AND sales discounts?

• Debit

• Credit

What is the normal balance of accumulated depreciation?

• Debit

• Credit