PATERSON FSU ACG 2021 FINAL
FORMULAS QUESTIONS AND
ANSWERS.
Net Income - Answer Revenues - Expenses
retained earnings - Answer net income-dividends
Ending Retained Earnings - Answer beginning retained earnings + net income - dividends
Basic Accounting Equation - Answer Assets=Liabilities-Stockholder's Equity
Stockholders' Equity - Answer common stock + retained earnings
Net cash flow - Answer cash inflows - cash outflows
order of financial statements - Answer I REB C
income statement, retained earnings statement, balance sheet, cash flow statement
Current Ration - Answer current assets/current liabilities
CACL
Liquidity - Answer short term payback (L-S)
Solvency - Answer Long term payback (S-L)
Earnings per Share - Answer net income-preferred dividends/average number of common
shares
Working Capital - Answer current assets - current liabilities
Debits - Answer Assests, expenses, dividends
Credits - Answer Revenues, Liabilities, Retained Earnings, Common Stock
, Financial Recording Process - Answer source document, journal, ledger, trial balance sheet
Cost of Goods for Sale - Answer Beginning Inventory + Cost of Goods purchased
FOB Shipping - Answer buyer pays
recognized as inventory purchase
Debit Inventory
Credit Cash
FOB Destination - Answer seller pays
recognized as operarting expense
Expense Account "Freight Out"
2/10, n/30 - Answer 2% discount if paid in 10 days, payment due in full by 30 days
1/10 EOM - Answer 1% off if paid within 10 days of next month
Sales Returns and Allowances - Answer contra-revenue account used to record refunds to
customers and reductions of their accounts
Sales Discounts - Answer contra-revenue account
Multi Step Income Statement - Answer Gross Profit, Operating Income, Net Income
NetSales-COGS=Gross Profit-Operating Expenses= Income from Operations +/- gains or losses=
net income
Gross Profit - Answer Sales Revenue- Costs of Good Sold
Operating Income - Answer Gross Profit- Operating Expense
Net Sales - Answer Sales Revenue- (Sales Returns and Allowances+Sales Discounts)
Periodic Formula - Answer Beginning Inventory (BI)
+Costs of Goods PURCHASED (COG)
FORMULAS QUESTIONS AND
ANSWERS.
Net Income - Answer Revenues - Expenses
retained earnings - Answer net income-dividends
Ending Retained Earnings - Answer beginning retained earnings + net income - dividends
Basic Accounting Equation - Answer Assets=Liabilities-Stockholder's Equity
Stockholders' Equity - Answer common stock + retained earnings
Net cash flow - Answer cash inflows - cash outflows
order of financial statements - Answer I REB C
income statement, retained earnings statement, balance sheet, cash flow statement
Current Ration - Answer current assets/current liabilities
CACL
Liquidity - Answer short term payback (L-S)
Solvency - Answer Long term payback (S-L)
Earnings per Share - Answer net income-preferred dividends/average number of common
shares
Working Capital - Answer current assets - current liabilities
Debits - Answer Assests, expenses, dividends
Credits - Answer Revenues, Liabilities, Retained Earnings, Common Stock
, Financial Recording Process - Answer source document, journal, ledger, trial balance sheet
Cost of Goods for Sale - Answer Beginning Inventory + Cost of Goods purchased
FOB Shipping - Answer buyer pays
recognized as inventory purchase
Debit Inventory
Credit Cash
FOB Destination - Answer seller pays
recognized as operarting expense
Expense Account "Freight Out"
2/10, n/30 - Answer 2% discount if paid in 10 days, payment due in full by 30 days
1/10 EOM - Answer 1% off if paid within 10 days of next month
Sales Returns and Allowances - Answer contra-revenue account used to record refunds to
customers and reductions of their accounts
Sales Discounts - Answer contra-revenue account
Multi Step Income Statement - Answer Gross Profit, Operating Income, Net Income
NetSales-COGS=Gross Profit-Operating Expenses= Income from Operations +/- gains or losses=
net income
Gross Profit - Answer Sales Revenue- Costs of Good Sold
Operating Income - Answer Gross Profit- Operating Expense
Net Sales - Answer Sales Revenue- (Sales Returns and Allowances+Sales Discounts)
Periodic Formula - Answer Beginning Inventory (BI)
+Costs of Goods PURCHASED (COG)
