ACC Exam 3 Review Formula

Gross profit rate=

Gross profit/ Net sales

Gross profit=

Net sales- Cost of goods sold

Net Sales=

Sales revenue - Allowance/ returns - discount

Profit Margin=

Net income/ Net sales

Net Income=

Net sales- Cost of goods= Gross profit

Gross profit- General/ admin expense= Income from operation

Income from operation- other expense -tax expense= Net income

Inventory turnover=

Cost of goods sold/ Average Inventory

Average inventory=

Beg. Inv. + Ending Inv. /2

Cost of goods sold=

Beg. Inv. + Purchases - Ending Inv.

Days in the inventory=

365/ Inventory turnover

Average of any Balance=

Beginning inventory + Ending inventory /2

Cost of goods available=

Beg. Inventory + Purchases

Cost of goods sold= Beg inv. + Purchases - Ending inv is also what equation?

Periodic

Straight line dep. =

Cost - Salvage value / useful life

Book value=

Cost- Acc. Dep.

Interest=

Principle x rate x time

Gain/ Lost=

Cash received- Book value

Gain=

Cash received > Book value —> Inc. to net income

Loss

Cash received < Book value —> dec. to net income

Net receivables/ Net Realizable value=

Accounts receivables- Allowance for doubtful accounts