Exam (elaborations)
WGU D103 Intermediate Accounting I Unit 5-7.
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WGU D103 Intermediate Accounting I Unit 5-7.
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WGU D103 Intermediate Accounting I Unit5-7
Accounts Receivable - ANS-Oral promises of the purchaser to pay for goods and
services sold.
Accounts Receivable Turnover - ANS-The ratio computed by dividing net sales by
average (net) accounts receivable outstanding during the year that measures the
number of times, on average, a company collects receivables during the period.
Aging Schedule - ANS-The analysis of customer balances by the length of time they
have been unpaid.
Allowance Method - ANS-A method for recording uncollectible receivables where an
estimate is made of the expected uncollectible receivables.
Average Days to Sell Inventory - ANS-The average number of days' sales for which a
company has inventory on hand.
Average-cost Method - ANS-An inventory costing method that assumes that the goods
available for sale are homogeneous.
Bank Overdrafts - ANS-When a check is written for more than the amount in the cash
account.
Cash - ANS-Resources that consist of coin, currency, money orders, certified checks,
cashier's checks, personal checks, and bank drafts.
Cash Discounts (Sales Discounts) - ANS-Discounts offered as an inducement for
prompt payment communicated in terms that read, for example, 2/10, n/30.
Cash Equivalents - ANS-Short-term, highly liquid temporary investments that are both
(a) readily convertible to known amounts of cash, and (b) so near their maturity that they
present insignificant risk of changes in interest rates.
Compensating Balances - ANS-Minimum cash balances required by a bank in support
of bank loans.
, Compound Interest - ANS-Interest accrues on the unpaid interest of past periods as well
as on the principal.
Consigned Goods - ANS-Goods shipped by a consignor who retains ownership to
another party called the consignee.
Cost of Goods Sold - ANS-The difference between the cost of goods available for sale
during the period and the cost of goods on hand at the end of the period.
Designated Market Value - ANS-The amount that a company compares to cost.
Direct Write-off Method - ANS-A method for recording uncollectible receivables where
no entry is made until a specific account has been established as uncollectible.
F.o.b Destination - ANS-The terms for shipping goods which state that title does not
pass until the buyer receives the goods from the common carrier.
F.o.b Shipping Point - ANS-The terms for shipping goods which state that title passes to
the buyer when the seller delivers the goods to the common carrier who acts as an
agent for the buyer
Finished Goods Inventory - ANS-The costs identified with the completed but unsold
units on hand at the end of the fiscal period.
First-in, First-out (FIFO) Method - ANS-An inventory costing method that assumes that
the costs of the earliest goods acquired are the first to be recognized as cost of goods
sold.
Imputed Interest Rate - ANS-An approximate, applicable interest rate that may differ
from the stated interest rate.
Interest - ANS-Payment for the use of money.
Inventories - ANS-Asset items that a company holds for sale in the ordinary course of
business, or goods that it will use or consume in the production of goods to be sold.
Inventory Turnover - ANS-The number of times on average a company sells the
inventory during the period.
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