This document provides an overview of key topics covered in Chapters 7-9 and 18 of an accounting textbook, including accounts receivable, inventory valuation, revenue recognition, and test taking strategies. Specifically, it outlines concepts like cash and cash equivalents, allowance method for accounts receivable, cost flow assumptions for inventory like FIFO and LIFO, the 5-step process for revenue recognition, and tips for managing time during an exam.
This document provides an overview of key topics covered in Chapters 7-9 and 18 of an accounting textbook, including accounts receivable, inventory valuation, revenue recognition, and test taking strategies. Specifically, it outlines concepts like cash and cash equivalents, allowance method for accounts receivable, cost flow assumptions for inventory like FIFO and LIFO, the 5-step process for revenue recognition, and tips for managing time during an exam.
This document provides an overview of key topics covered in Chapters 7-9 and 18 of an accounting textbook, including accounts receivable, inventory valuation, revenue recognition, and test taking strategies. Specifically, it outlines concepts like cash and cash equivalents, allowance method for accounts receivable, cost flow assumptions for inventory like FIFO and LIFO, the 5-step process for revenue recognition, and tips for managing time during an exam.
This document provides an overview of key topics covered in Chapters 7-9 and 18 of an accounting textbook, including accounts receivable, inventory valuation, revenue recognition, and test taking strategies. Specifically, it outlines concepts like cash and cash equivalents, allowance method for accounts receivable, cost flow assumptions for inventory like FIFO and LIFO, the 5-step process for revenue recognition, and tips for managing time during an exam.
Key Topics – Ch 7 • Cash and cash equivalents • Recognition of AR • Trade discounts • Sales discounts (gross method vs. net method) • Sales returns and allowances • Valuation of AR • Direct write-off method • Allowance method • Entries • Determining bad debt expense (% of sales, % of receivables, aging of AR) Key Topics – Ch 7 • Notes receivable • Zero-interest bearing • Interest-bearing • Notes received in exchange for property, goods, or services • Fair value option • Disposition of AR • Factoring (with and without recourse) • Secured borrowing • Analysis of AR • AR Turnover Key Topics – Ch 18 • 5-Step Process • Identify performance obligations • Determine transaction price • Variable consideration (expected value versus most likely amount) • Time value of money • Noncash consideration • Volume discounts • Allocate transaction price to performance obligation • If all standalone selling prices known, then based on percentage of total standalone selling prices • If all standalone selling prices not known, then allocate to known items first, then residual is allocated to unknown item Key Topics – Ch 18 • Know when performance obligation is satisfied (and revenue recognized) • Change in control • Sales returns and allowances • Cash versus credit sales • Repurchase agreements (conceptually) • Bill-and-hold arrangements (conceptually) • Consignments (entries and calculations) • Warranties (entries and calculations) Key Topics – Ch 18 • Contract modification • New contract versus pure modification • Percentage-of-completion method • Contract with profit in every year • Loss in interim period, but overall profitable contract • Loss on unprofitable contract • Completed contract method • Overall profitable contract • Loss on unprofitable contract Key Topics – Ch 8 • Accounts used by merchandising company versus manufacturer • Periodic inventory method • Perpetual inventory method • Goods included in inventory • Goods in transit (FOB shipping point versus FOB destination) • Consigned goods • Sales with repurchase agreement • Purchase discounts (gross versus net method) Key Topics – Ch 8 • Cost flow assumptions • Specific ID • Average cost • Weighted-average method (periodic) • Moving-average method (perpetual) • FIFO (periodic versus perpetual) • LIFO (periodic versus perpetual) • LIFO Reserve & LIFO Layers • Dollar Value LIFO • Inventory errors Key Topics – Ch 9 • Calculation of NRV • Lower-of-cost-or-NRV (LCNRV) • Calculations & entries • Loss method versus COGS method • Allowance versus no Allowance • Lower-of-cost-or-market (LCM) • Calculations & entries • Loss method versus COGS method • Allowance versus no Allowance Key Topics – Ch 9 • Alternative valuation approaches • NRV • Relative Sales Value (for lump-sum purchases) • Gross Profit method • Gross profit on selling price versus markup on cost • Retail Inventory Method • Conventional (LCM) • Cost • LIFO Retail • Treatment of special items • Analysis – Inventory Turnover, Average Days to Sell Inventory Test Taking Tips • Be mindful of time! • Recommended strategy • Allocate 1 minute per point. 100 points = 100 minutes • That gives you the remaining time to come back to any unfinished problems while also ensuring that you attempt every problem. • If you can’t finish a question within the allocated time, move on and come back later. • Know your strengths and weaknesses. • At the start of the exam, quickly skim through the exam and identify the major topics of each problem. • To build confidence and alleviate some of the anxiety, start out with a topic you’re strong in • Then move on to topics in which you’re less confident • Be sure to attempt the heavily weighted problems. Good Luck Studying! • If you have any questions, stop by office hours, post on Piazza, or send us an email. • Good luck!!