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LU3 : excluding Declining Balance Depreciation Method

19 important questions on LU3 : excluding Declining Balance Depreciation Method

Cost of Sales Expense

Represents the cost of (raw materials) inventory products used in the selling process, and therefore applies only to revenue-producing centers. Products used

Perpetual Bookkeeping accounts

Inventory
Cost of Sales
Employee Meals Expense

Cost of Sales account

Separate accounts are maintained to identify the cost of goods sold (F&B items and gift shop merchandise).

Perpetual Inventory Accounting

The accounting department processes various documents that are recorded to the bookkeeping accounts in the funeral ledger

Periodic Bookkeeping Accounts

The system where the general ledger account Inventory is not updated during the year. Rather, the merchandise purchased is recorded in temporary purchases accounts.

Cost of Sales Formula for the periodic Inventory System

Beginning Food Inventory
+ Food Inventory purchases
= Food available for sale (during the month)
- Ending Food inventory (end of the month)
= Cost of Food Consumed (during the month)
(- any transfers or complimentary food?)
- Staff meals consumed (during the month)
= Cost of Food Sales for the month

Employee Meals Expense account

Record of the cost of employee meals for a specific department

Employee Meals Credit

Represents employee meals for all departments

Periodic Inventory Accounting

The inventory account, only the balance as of the beginning of the period.
Cost of Sales account does not exist.
Purchases account contains contains the toal purchases of the periode

Income Taxes Expense

A specified minimum payment, A tax computed on corporate equity, a tax computed on taxable income

Depreciation Expense account

Showing the depreciation calculation for only the current reporting period

Accumulated Depreciation account

Balance sheet account showing the cumulative depreciation amount for all periods.

2 most common financial methods of depreciating qualifying assets over their useful lives

Straight-line method
Declining balance method

Straight-line Depreciation method

This method calculation produces the same depreciation expense amount each year. At the end of the asset's useful life, salvage value, if any is used to reduce the asset's depreciable basis.

Straight-line Depreciation Method formula

(Cost- Salvage) : Useful life = Annual Depreciation Expense

Optional Depreciation Computation Method

The method uses a percentage rate that is applied to the asset's purchase cost minus its estimated salvage value at the end of its useful life.

What is the purpose of Ratio Analysis for Managers?

They use ratios to monitor operating performance and evaluate their success in meeting goals.

What is the purpose of Ratio Analysis for Creditors?

To evaluate the liquidity and solvency of a business and to assess the risk of future loans.

What is the purpose of Ratio Analysis for Investors?

To evaluate the performance of a business and the business's ability to meet the investors' specific goals.

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Creating Business Value

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Topics that are related to LU3 : excluding Declining Balance Depreciation Method

Excluding Declining Balance Depreciation Method

LU3 : excluding Declining Balance Depreciation Method

19 important questions on LU3 : excluding Declining Balance Depreciation Method

Cost of Sales Expense

Perpetual Bookkeeping accounts

Cost of Sales account

Perpetual Inventory Accounting

Periodic Bookkeeping Accounts

Cost of Sales Formula for the periodic Inventory System

Employee Meals Expense account

Employee Meals Credit

Periodic Inventory Accounting

Income Taxes Expense

Depreciation Expense account

Accumulated Depreciation account

2 most common financial methods of depreciating qualifying assets over their useful lives

Straight-line Depreciation method

Straight-line Depreciation Method formula

Optional Depreciation Computation Method

What is the purpose of Ratio Analysis for Managers?

What is the purpose of Ratio Analysis for Creditors?

What is the purpose of Ratio Analysis for Investors?

Topics that are related to LU3 : excluding Declining Balance Depreciation Method

Excluding Declining Balance Depreciation Method

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