Major Field Test Business Study Set, ETS MFT BUSINESS EXAM Study Guide Solutions
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Course
ETS Major Field
Institution
ETS Major Field
Major Field Test Business Study Set, ETS
MFT BUSINESS EXAM Study Guide
Solutions
Balance Sheet - ANSWER-Attempts to describe the financial condition of the firm at a point in time.
Includes: Assets, Liabilities, & Equity - "net assets" what remains after deducting liabilities from assets..
Inc...
Inventory is counted and costed at the end of each accounting period. The inventory account beginning
balance is adjusted to physical inventory amount and the difference is added to or subtracted from
periodic Cost of Goods Sold.
Perpetual Inventory Accounting - ANSWER✔✔-Merchandise purchases are added to the inventory
account when the merchandise is received.
Cost of Goods Sold is computed and subtracted from the inventory account as sales are recorded.
FIFO (Inventory) - ANSWER✔✔-Inventory Oldest items inventory are sold first .(Example: Fruit)
LIFO (Inventory) - ANSWER✔✔-Most recent items added to inventory are sold first. (Example: Ore from
Mining)
Average Cost (Inventory) - ANSWER✔✔-Ending inventory units are costed using an average cost of goods
available divided by the units available for sale. (Example: Rope)
Specific Identification (Inventory) - ANSWER✔✔-Inventory items are tagged with their cost. (Example:
automobiles)
Generally Accepted Accounting Principles (GAAP) - ANSWER✔✔-A framework of accounting standards,
rules and procedures defined by the professional accounting industry, which has been adopted by nearly
all publicly traded U.S. companies.
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