Accounting.Finals

• Luca Pacioli is the Father of Modern Accounting
• Purchased supplies/equipment on account: [A+][L+]
• Charged customers for services made on account: [A+][OE+]
• Paid cash rent for the business: [A-][OE-]
• Cost of Goods Available for Sale = Beginning Inventory + Purchases (- Freight In/Out)
• Cost of Goods Sold = Beginning Balance - Ending Balance
• Ending Inventory = Beginning Inventory + Net Purchases - COGS
• Net Cost of Purchases = Merchandise Purchases + Freight In/Out - Purchase Allowance & Returns (-Discounts)
• COGS = Beginning Inventory + Net Purchases - Ending Inventory
• Beginning Inventory = Cost of Goods Available for Sale – Net Purchases
• Income Statement (Profit/Loss) shows the performance of the business over a period of time.
• Allowance for Bad Debts is a contra-asset account, not an expense.
• Sales Discount, Returns, and Allowances are example of contra-revenue account.