UGA accounting entrance exam

Ending Retained Earnings

beginning retained earnings + net income - dividends

Assets

Cash, Accounts Receivable, Inventory, Supplies, Prepaid expenses, PPE

Liabilities

_______ Payable, Unearned Payable, Bonds, Notes Payable.

Shareholders Equity

Ending Common Stock, Ending Retained Earnings - broken down into BRE equation broken down into Revenues - Expenses

Operating Activities

Cash flow activities that include the cash effects of transactions that create revenues and expenses.

Investing Activities

Includes cash transactions involving the purchase and sale of long-term assets.

Financial Activities

borrowing or repaying banks or shareholders

DEAD rule?

Debits increase for Expenses, Assets, and Dividends

entry for issuing a note/issuing stock

Cash D

N/P C

entry for Purchasing PPE

PPE D

Cash C

entry for Purchasing supplies/inventory with cash

Supplies D

Cash C

entry for Purchasing supplies/inventory on account

Supplies D

Accounts Payable C

entry for Providing services for cash

Cash D

Service Revenue C

entry for Providing services on account

Accounts Receivable D

Service Revenue C

entry for Paying Employees

Wages expense D

Cash C

entry for Reciept of unearned revenue

Cash D

Unearned Revenue C

entry for Prepaying Rent/ Insurance

Prepaid Rent/Insurance D

Cash C

entry for Paying One Month of Rent

Rent expense D

Cash C

(adjusting entry) Receiving cash in advance before receiving it (2 entries)

Cash D

Unearned Revenue C

Unearned Revenue D

Revenue C

(adjusting entry) Accruing revenue before receiving cash (2 entries)

Accounts receivable D

Revenue C

Cash D

Accounts Receivable C

entry for Paying Rent/Insurance in advance before expensing it (2 entries)

Prepaid Rent/Insurance D

Cash C

Rent/Insurance expense D

Prepaid rent/insurance C

entry for Paying for Supplies in advance before expensing it (2 entries)

Supplies D

Cash C

Supplies Expense D

Supplies C

entry for Paying for Equipment (PPE) in advance before expensing it (2 entries)

PPE D

Cash C

Depreciation Expense D

Accumulated Depreciation C

entry for Accruing Wages/Interest Before paying cash (2 entries)

Wages/interest Expense D

Wages/interest Payable C

Wages/interest Payable D

Cash C

Entry for selling inventory

COGS D

Inventory C

(perpetual) entry for a purchase of inventory on account

Inventory D

Accounts Payable C

entry for paying for Inventory

Accounts Payable D

Cash C

(perpetual) entry for purchase returns

Accounts Payable D

Inventory C

(perpetual) entry for purchase discount

Accounts Payable D

Inventory C

Cash C

(Perpetual) Entry for buyer's shipping (FOB shipping point)

Inventory D

Cash C

(perpetual) Entry for seller's sales (2 entries)

Accounts Receivable D

Sales C

COGS D

Inventory C

(perpetual) entry for sales returns (2 entries)

Sales returns D

Accounts Receivable C

Inventory D

COGS expense C

(perpetual) Entry for sales discount

Cash D

Sales Discount D

Accounts Receivable C

(perpetual) entry for Seller's shipping (FOB Destination Point)

Freight-out expense D

Cash C

(Periodic) Purchases

Purchases D

Accounts Payable C

(periodic) Purchase Returns

Accounts Payable D

Purchase Returns C

(periodic) Purchase Discount

Accounts Payable D

Purchase Discounts C

Cash C

(periodic) Buyer's shipping (FOB shipping point)

Freight-in D

Cash C

(periodic) Sales

Accounts Receivable D

Sales Revenue C

(periodic) Sales Returns

Sales Returns D

Accounts Receivable C

(periodic) Sales Discount

Cash D

Sales Discount D

Accounts Receivable C

(periodic) Seller's Shipping (FOB Destination Point)

Freight-Out expense D

Cash C

Net Purchases

Purchase price - purchase returns - purchase discounts - purchase allowances - net purchases + shipping

Net Sales

Sales - Sales returns - Sales Discounts - Sales Allowances

Gross Margin / Gross Profit

Net sales - COGS expense

Income from Operations

Net Sales - COGS Expense - Operating expenses (Freight-out, Bad Debt Expense, Depreciation Expense)

When prices are rising, which costing method is best?

LIFO (lower taxes)

If cost of inventory is falling, which costing method is best?

FIFO

Entry for Bad Debt Expense

Bad Debt Expense (BDE) D

Allowance for Doubtful Accounts (ADA) C

Entry for a write off

ADA D

Accounts Receivable C

(when a customer debt is confirmed to be uncollectible)

entry for reinstatement

Accounts Receivable D

ADA C

When a customer we have previously written off has hit the lottery and promises to pay us in the future

Entry for recovery of an uncollectible account (2 entries)

Accounts Receivable D

ADA C

Cash D

Accounts Receivable C

When a customer we have previously written off has hit the lottery and gives us the money for their previous debt

Entry for receiving a note

Cash D

Notes Receivable C

Interest Revenue C

Entry for an Honored Note

Cash D

Notes Receivable C

Interest Revenue C

Straight Line depreciation formula

(cost - salvage value) / useful life

double declining balance formula

2/Useful Life x Net Book Value of Asset

Book Value

Cost - accumulated Depreciation

Entry for depreciation

Depreciation Expense D

Accumulated Depreciation C

Entry for a gain (depreciation)

Sales Price - Book Value = +

Cash D

Acc. Dep D

PPE C

Gain C

Entry for a loss (depreciation)

Sales Price - Book Value = -

Loss D

Acc. Dep D

Cash D

PPE C

Entry for when a liability is likely and damages are estimable

Contingent Loss D

Contingent Liability C

Entry for a Warranty Estimate

Warranty Expense D

Estimated Warranty Liability C

Entry for when a warranty is exercised by a customer

Estimated Warranty Liability D

Supplies/cash C

Entry for Sales Tax

Cash D

Sales tax C

Sales Revenue C

Entry for Employee taxes

Salaries Expense D

FICA Payable C

Fed Inc tax C

State inc tax C

etc...

entry for bonds issued at a discount

Cash D

Discounts D

Bonds Payable C

entry for amortization of a Bond at Discount

Interest Expense D

Cash C

Discount C

Entry for Bonds issued at a Premium

Cash D

Premium C

Discount C

Entry for Amortization of a Bond Premium

Premium D

Interest Expense D

Cash C

Interest Expense Recorded formula (Effective Interest Method)

MR * CV

Market rate * Carrying Value

Interest Paid formula

CR * FV

Carrying or Credit Rate * Face Value

Carrying Value Formula

Previous CV + Amortization

Interest Expense Recorded (Straight-Line Method)

X - Interest Paid = Amortization

Entry for a Bond issued at discount redeemed before maturity

Bonds Payable D

Discount C

Gain C

Cash C

Entry for a Bond issued at a premium redeemed before maturity

Bonds Payable D

Premium D

Gain C

Cash C

Entry to issue Common Shares with Par Value

Cash D

CS-Par C

APIC-CS C

Entry to Issue Preferred Shares With Par value

Cash D

PS-Par C

APIC-PS C

Entry to Repurchase Treasury Shares

Treasury Stock D

Cash C

Par value does not matter with Treasury Stock

Entry to Sell Treasury Stock (gain)

Cash D

TS C

APIC-TS C

Entry to Sell Treasury Stock (loss)

Cash D

APIC-TS D

TS C

IF APIC IS NOT AVAILABLE USE RE

Entry to declare Declaration Date (cash dividends)

Cash Dividends D

Dividends Payable PS C

Dividends Payable CS C

Entry to Record Date Entry (cash dividends)

NO JOURNAL ENTRY!

Entry to record Payment Date Entry (cash dividends)

Dividend Payable- PS D

Dividend Payable- CS D

Cash C

Closing entry for Cash dividends to Retained Earnings

Retained Earnings D

Cash dividends C

entry for Declaration Date (small stock dividends)

Stock Dividend D

Stock Div. Distributable C

APIC-CS C

entry for Distribution Date (small stock dividends)

Stock Div. Distributable D

CS C

Entry to close dividends to Retained Earnings (small stock dividends)

Retained Earnings D

Stock Dividends C

Entry for Declaration Date (large stock dividends)

Stock Dividends D

Stock Divi. Distributable C

Entry for Distribution Date (large stock dividends)

Stock dividends distributable D

CS C

Entry to close dividends to retained earnings (large stock dividends)

Retained Earnings D

Stock dividends C