Bus-A200 Exam 2 ACTUAL UPDATED Questions and CORRECT Answers
Terms in this set (43)
multiple step income statement sales revenue-Variable costs=contribution margin-fixed costs= net income
FOB shipping point the title passes from the seller to the buyer at the shipping point.
FOB destination the title passes from the seller to the buyer at the destination
product cost definition how much it costs to get your products into the store
"n/30" 30 days no interest
"2/10, n/30" 2% discount if pays in 10 days
internal controls protect the companies assets (merchandise)
FIFO first in, first out - higher ending inventory value. Use in periods on declining prices
LIFO last in, first out - lowest ending inventory value. More clearly matches current
inventory costs with sales revenue. Use in periods of rising prices
Product cost becomes an asset than expense when sold
period cost always be an expense "right now". administrative costs are always a period cost
variable cost cost that changes in total as activity changes
fixed cost cost that does not change in total as activity changes ex) advertising
At break even point Contribution margin is equal to your fixed costs
break even formula fixed cost/contribution margin per unit
Target Net income formula (fixed costs+target net income)/contribution margin per unit
total costs= fixed costs + variable costs
gross margin/profit the difference between the sales revenue and the COGS
Perpetual inventory system inventory account is adjusted perpetually throughout the accounting period. Each
time merchandise is purchased, the inventory account is increased; each time it is
sold the inventory account is decreased.
Terms in this set (43)
multiple step income statement sales revenue-Variable costs=contribution margin-fixed costs= net income
FOB shipping point the title passes from the seller to the buyer at the shipping point.
FOB destination the title passes from the seller to the buyer at the destination
product cost definition how much it costs to get your products into the store
"n/30" 30 days no interest
"2/10, n/30" 2% discount if pays in 10 days
internal controls protect the companies assets (merchandise)
FIFO first in, first out - higher ending inventory value. Use in periods on declining prices
LIFO last in, first out - lowest ending inventory value. More clearly matches current
inventory costs with sales revenue. Use in periods of rising prices
Product cost becomes an asset than expense when sold
period cost always be an expense "right now". administrative costs are always a period cost
variable cost cost that changes in total as activity changes
fixed cost cost that does not change in total as activity changes ex) advertising
At break even point Contribution margin is equal to your fixed costs
break even formula fixed cost/contribution margin per unit
Target Net income formula (fixed costs+target net income)/contribution margin per unit
total costs= fixed costs + variable costs
gross margin/profit the difference between the sales revenue and the COGS
Perpetual inventory system inventory account is adjusted perpetually throughout the accounting period. Each
time merchandise is purchased, the inventory account is increased; each time it is
sold the inventory account is decreased.
