ACG 2021 Exam 3 with all Correct & 100% Verified
Answers |Guaranteed to Pass
Cost of Goods Sold Equation (Periodic Inventory) ✔Correct Answer-Beginning Inventory +
Purchases - Ending Inventory
Specific Identification ✔Correct Answer-Method for assigning cost to inventory that identifies
the cost of each specific item purchased and sold. (Usually expensive items like a jet or plane)
lower of cost or market ✔Correct Answer-Method from the cost principle that recognizes a
loss when inventory value drops below cost. LCM/NRV (Lowest cost x the # of inventory)
Inventory Turnover Ratio ✔Correct Answer-Cost of Goods Sold/Average Inventory
Days to Sell ✔Correct Answer-365/Inventory Turnover Ratio
Note Receivable ✔Correct Answer-a promise that requires another party to pay the business
according to a written agreement.
Accounts Receivable ✔Correct Answer-the total amount of money owed to a business by
customers
Allowance Method ✔Correct Answer-A method of accounting that reduces accounts
receivable (as well as net income) for an estimate of uncollectible accounts (bad debts).
Receivable write-off ✔Correct Answer-The act of removing an uncollectible account
receivable and its corresponding allowance from the accounting records.
Percentage of Credit Sales ✔Correct Answer-A method for estimating bad debts based on the
percentage of sales expected to lead to bad debt losses. (Also called Income Statement
approach)
Aging of Accounts Receivable (More accurate) ✔Correct Answer-A method for estimating bad
debts by uncollectible accounts based on the age of each account receivable. (Also called
Balance Sheet approach)
Interest Formula (annual;months;12) ✔Correct Answer-Principal x Interest rate x time(out of
12 months)
Capitalized ✔Correct Answer-To record a cost as an asset, rather than an expense.
Answers |Guaranteed to Pass
Cost of Goods Sold Equation (Periodic Inventory) ✔Correct Answer-Beginning Inventory +
Purchases - Ending Inventory
Specific Identification ✔Correct Answer-Method for assigning cost to inventory that identifies
the cost of each specific item purchased and sold. (Usually expensive items like a jet or plane)
lower of cost or market ✔Correct Answer-Method from the cost principle that recognizes a
loss when inventory value drops below cost. LCM/NRV (Lowest cost x the # of inventory)
Inventory Turnover Ratio ✔Correct Answer-Cost of Goods Sold/Average Inventory
Days to Sell ✔Correct Answer-365/Inventory Turnover Ratio
Note Receivable ✔Correct Answer-a promise that requires another party to pay the business
according to a written agreement.
Accounts Receivable ✔Correct Answer-the total amount of money owed to a business by
customers
Allowance Method ✔Correct Answer-A method of accounting that reduces accounts
receivable (as well as net income) for an estimate of uncollectible accounts (bad debts).
Receivable write-off ✔Correct Answer-The act of removing an uncollectible account
receivable and its corresponding allowance from the accounting records.
Percentage of Credit Sales ✔Correct Answer-A method for estimating bad debts based on the
percentage of sales expected to lead to bad debt losses. (Also called Income Statement
approach)
Aging of Accounts Receivable (More accurate) ✔Correct Answer-A method for estimating bad
debts by uncollectible accounts based on the age of each account receivable. (Also called
Balance Sheet approach)
Interest Formula (annual;months;12) ✔Correct Answer-Principal x Interest rate x time(out of
12 months)
Capitalized ✔Correct Answer-To record a cost as an asset, rather than an expense.
