ACC 231 EXAM 2 2026 REVISION NOTES AND
STRUCTURED ACCOUNTING OVERVIEW
GUIDE
◉ examples of current liabilities. Answer: accounts payable, wages
payable, unearned revenue, taxes payable
◉ Long-term liabilities. Answer: not due within a year or operating
cycle which ever is longer
◉ examples of long-term liabilities. Answer: notes payable,
mortgages payable, bonds payable, lease obligations
◉ New Accounts. Answer: -inventory (current asset)
-cost of goods sold (expense)
-sales (revenue)
-sales discounts (contra-revenue)
-sales returns and allowances (contra-revenue)
-delivery expense (expense)
◉ Inventory cost. Answer: all costs required to acquire and make
ready for sale
, ◉ perpetual system for inventory. Answer: continuously update
inventory records
◉ periodic system. Answer: update our inventory records at the end
of each accounting period
◉ Purchase Discounts. Answer: discount for paying in a timely
manner
-credit terms (2/10, n/30)
◉ Purchases returns. Answer: return the inventory to seller (usually
for full refund)
◉ Purchases allowances. Answer: reduction of the cost of defective
merchandise
◉ Transportation cost and ownership transfer. Answer: -2 terms
FOB shipping point=buyer pays
FOB destination=seller pays
◉ Sale of merchandise. Answer: 2 parts to every sale
-receipt of revenue
STRUCTURED ACCOUNTING OVERVIEW
GUIDE
◉ examples of current liabilities. Answer: accounts payable, wages
payable, unearned revenue, taxes payable
◉ Long-term liabilities. Answer: not due within a year or operating
cycle which ever is longer
◉ examples of long-term liabilities. Answer: notes payable,
mortgages payable, bonds payable, lease obligations
◉ New Accounts. Answer: -inventory (current asset)
-cost of goods sold (expense)
-sales (revenue)
-sales discounts (contra-revenue)
-sales returns and allowances (contra-revenue)
-delivery expense (expense)
◉ Inventory cost. Answer: all costs required to acquire and make
ready for sale
, ◉ perpetual system for inventory. Answer: continuously update
inventory records
◉ periodic system. Answer: update our inventory records at the end
of each accounting period
◉ Purchase Discounts. Answer: discount for paying in a timely
manner
-credit terms (2/10, n/30)
◉ Purchases returns. Answer: return the inventory to seller (usually
for full refund)
◉ Purchases allowances. Answer: reduction of the cost of defective
merchandise
◉ Transportation cost and ownership transfer. Answer: -2 terms
FOB shipping point=buyer pays
FOB destination=seller pays
◉ Sale of merchandise. Answer: 2 parts to every sale
-receipt of revenue
