Inventory & COGS Flashcard

Front

What is Inventory in a Merchandising Business?

Back

Goods that are bought and resold to earn revenue

Front

How is Inventory classified on the Balance Sheet?

Back

Current asset

Front

In the example, what item does the business sell? Options: Scarves, Gloves, Hats/Toques, Jackets

Back

Hats/Toques

Front

If a Merchandising Business buys inventory for cash, what is the correct journal entry?

Back

Debit Inventory, Credit Cash

Front

When you sell a hat for $7 "on account," which accounts are affected?

Back

Debit Accounts Receivable, Credit Revenue

Front

What is the second journal entry needed after a sale?

Back

Debit Cost of Goods Sold, Credit Inventory

Front

Cost of Goods Sold is classified as which type of account?

Back

Expense

Front

What does the acronym DEALER stand for? Options: Dividends, Expenses, Assets (debits), Liabilities, Equity, Revenue (credits)

Back

Dividends, Expenses, Assets (debits), Liabilities, Equity, Revenue (credits)

Front

How do T-Accounts help accountants?

Back

They visualize how transactions impact accounts

Front

Which financial statement shows revenues and expenses over a period of time?

Back

Income Statement