UGA accounting entrance exam Flashcards

Vocabulary and journal entries for the UGA accounting entrance exam based on the provided guide.

Ending Retained Earnings

$$\text{beginning retained earnings} + \text{net income} - \text{dividends}$$

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

Receiving cash in advance before receiving it (adjusting entry)

Cash D Unearned Revenue C; Unearned Revenue D Revenue C

Accruing revenue before receiving cash (adjusting entry)

Accounts receivable D Revenue C; Cash D Accounts Receivable C

Entry for Paying Rent/Insurance in advance before expensing it

Prepaid Rent/Insurance D Cash C; Rent/Insurance expense D Prepaid rent/insurance C

Entry for Paying for Supplies in advance before expensing it

Supplies D Cash C; Supplies Expense D Supplies C

Entry for Paying for Equipment (PPE) in advance before expensing it

PPE D Cash C; Depreciation Expense D Accumulated Depreciation C

Entry for Accruing Wages/Interest Before paying cash

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

Accounts Receivable D Sales C; COGS D Inventory C

Perpetual entry for sales returns

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

$$\text{Purchase price} - \text{purchase returns} - \text{purchase discounts} - \text{purchase allowances} - \text{net purchases} + \text{shipping}$$

Net Sales

$$\text{Sales} - \text{Sales returns} - \text{Sales Discounts} - \text{Sales Al lowances}$$

Gross Margin / Gross Profit

$$\text{Net sales} - \text{COGS expense}$$

Income from Operations

$$\text{Net Sales} - \text{COGS Expense} - \text{Operating expenses (Freight-out, Bad Debt Expense, Depreciation Expense)}$$

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 Al lowance for Doubtful Accounts (ADA) C

Entry for a write off

ADA D Accounts Receivable C (when a customer debt is confirmed to be uncol lectible)

Entry for reinstatement

Accounts Receivable D ADA C (When a customer written off hit the lottery and promises to pay)

Entry for recovery of an uncollectible account

Accounts Receivable D ADA C; Cash D Accounts Receivable C (When a previously written off customer pays 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

$$\frac{\text{cost} - \text{salvage value}}{\text{useful life}}$$

double declining balance formula

$$\frac{2}{\text{Useful Life}} \times \text{Net Book Value of Asset}$$

Book Value

$$\text{Cost} - \text{accumulated Depreciation}$$

Entry for depreciation

Depreciation Expense D Accumulated Depreciation C

Entry for a gain (depreciation)

$\text{Sales Price} - \text{Book Value} = +$; Entry: Cash D Acc. Dep D PPE C Gain C

Entry for a loss (depreciation)

$\text{Sales Price} - \text{Book Value} = -$; Entry: 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)

$MR \times CV$ where MR is Market rate and CV is Carrying Value

Interest Paid formula

$CR \times FV$ where CR is Carrying or Credit Rate and FV is Face Value

Carrying Value Formula

$$\text{Previous CV} + \text{Amortization}$$

Interest Expense Recorded (Straight-Line Method)

$$X - \text{Interest Paid} = \text{Amortization}$$

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)

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