intro to financial accounting - midterm 2 (chapters 5 - 9) - rutgers nb

buyer pays shipping cost

debit inventory
credit cash

seller pays shipping cost

debit freight-out (delivery expense)
credit cash

returning things bought on account

debit AP
credit inventory

discount as seller

debit cash
debit sales discounts
credit AR

discounts as buyer

debit AP
credit cash
credit inventory

recording sales

1st
debit cash/AR
credit SR

2nd
debit COGS
credit inventory

accepting return from customer

1st
debit sales returns & allowances (selling price)
credit AR (selling price)

2nd
debit inventory (cost)
credit COGS (cost)

buyer failing to take discount, then taking it later

failing to accept
debit cash
credit AR

accepting
debit cash
debit sales discounts
credit AR

adjusting entry

debit COGS (difference between actual and mistake)
credit inventory (difference between actual and mistake)

FOB point

buyer pays

FOB destination

seller pays

BEG inventory UNDER
END inventory OVER

cogs under
net income over

BEG inventory OVER
END inventory UNDER

cogs over
net income under

entry to recognize receivable

debit AR
credit SR

direct-write off method

debit bad debt expense
credit AR

allowance method

debit bad debt expense
credit allowance for doubtful accounts

write-off of uncollectible account

debit allowance for doubtful accounts
credit AR

recovery of uncollectible account

1st
debit AR
credit allowance for doubtful accounts

2nd
debit cash
credit AR

adjusting entry aging with credit balance

debit bad debt expense (ending balance - credit balance)
credit allowance for doubtful accounts (ending balance - credit balance)

adjusting entry aging with debit balance

debit bad debt expense (ending balance + debit balance)
credit allowance for doubtful accounts (ending balance + debit balance)

credit card sales

debit cash (price - percent from card)
debit service charge expense (percent from card)
credit SR (price)

recognizing notes receivable

debit NR
credit AR

no interest nothing, just the amount the note was for

honor of notes receivable

debit cash (note amount + revenue)
credit NR (just the note amount)
credit interest rev (revn after calculation)

accrual of interest adjusting entry

debit cash (note amount + interest receivable + interest rev)
credit NR (note amount)
credit interest receivable (interest gained before adjustment)
credit interest revenue (interest gained after adjustment (remained)

cost of land

cash cost + net cost (removing something and has salvage value, do the cost to remove - salvage value to get net cost) + attorney fee + broker commission

debit land
credit cash

straight line

cost - salvage value = depreciable cost

then

depreciable cost / useful life = depreciation expense

all these depreciation entries

debit depreciation expense
credit accumulated depreciation

units of activity

depreciable cost / total units of activity = cost per unit

then

cost per unit * units of activity during year = depreciation expense

double-decline

twice straight line

book value at start * double decline rate = depreciation expense

amortize patent

cost / useful life = annual expense
(remember this is annual, multiple by X months/12months to get for however many months)

debit amortization expense
credit patents

discarded something fully depreciated

debit accumulated depreciation (equipment/plant.etc)
credit equipment

sale of plant assets

debit cash (sold for)
debit accumulated depreciation -equipment (annual deprecation * x years)
debit loss on disposal
or
credit gain on disposal (sell price - book value)
credit equipment (what it was bought for)

annual deprecation expense

(cost - salvage) / useful years

sold mid year

annual depreciation * x months /12months = depreciation expense


debit depreciation expense
credit accumulated depreciation - equipment

then

debit cash (sold for)
debit accumulated depreciation -equipment (annual deprecation * x years)
debit loss on disposal
or
credit gain on disposal (sell price - book value)
credit equipment (what it was bought for)