Key Costing Formulas and Financial Statements
Key Costing Formulas
Sales – Variable Expenses (VE) = Contribution Margin (CM) SP per unit – VE per unit = CM per unit BE point in units = Fixed Costs (FC) / CM per unit BE point in dollars = BE units * SP per unit CM Ratio = CM / Sales Operating Leverage = CM / Net income | Target Sales in $ = (Fixed Expenses (FE) + Target Operating Profit) / CM ratio Sales – VE – FE = Operating Income CM – FC = Operating Profit Target Sales in units = (FE + Target Operating Profit) / CM per Unit Safety Margin = Budgeted Sales |
Understanding Balance of Payments, Exchange Rates, and Monetary Policy
Item 7: Balance of Payments and Exchange Rates
The balance of payments reflects a country’s transactions with the rest of the world. The balance of trade is the difference between exports and imports. The balance of goods and services of a country is the difference between exports and imports over a given period. The current account balance is the sum of the balance of goods and services, plus net income, plus net transfers. The financial account balance measures financial flows. The sum of the current
Read MoreSpain’s Balance of Payments: A Detailed Analysis
Item 11: External Sector
11.1. Structure of the Spanish Balance of Payments
The Balance of Payments represents the operations a country places with the rest of the world in an accounting document with economic transactions made over a period of time. Currently, the model which is followed is published by the IMF. It is made up of 4 sub-balances:
- Current Account: Includes all external transactions that may affect the income of a country.
- Trade Balance: Reflects the costs and revenues associated with
Fairchild Company Cash Flow Statement 2012
Fairchild Company | ||
Statement of Cash Flows | ||
For the Year Ended December 31, 2012 | ||
(Indirect Method) | ||
Cash Flows from Operating Activities | ||
Net income…………………………………………………………….. | $ 810 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense ($1,200 – $1,170)………… | $ 30 | |
Gain on sale of |
Inventory & Accounting: Transactions & Financial Reporting
Inventory Accounting
Purchasing Inventory
- Purchases
- Debit Inventory
- Credit Accounts Payable or Cash
- Purchase Return
- Debit Accounts Payable or Cash
- Credit Inventory
- Purchase Shipping
- Debit Inventory
- Credit Cash
- Pay for Purchase
- Debit Accounts Payable
- Credit Cash
- Credit Discount (if earned)
Impact on Inventory
- Purchasing Inventory: Debit
- Returning Inventory: Credit
- Purchase Shipping: Debit
- Purchase Discount: Credit
Sales Transactions
- Sale
- Debit Accounts Receivable
- Credit Sales
- Debit Cost of Goods Sold
- Credit Inventory
- Sales
Key Accounting Principles and Equation Practice
Which of the following is not a step in the accounting process?
- Recording.
- Verification.
- Identification.
- Communication.
Which of the following statements about users of accounting information is incorrect?
- Regulatory authorities are internal users.
- Taxing authorities are external users.
- Present creditors are external users.
- Management is an internal user.
The historical cost principle states that:
- Only transaction data capable of being expressed in terms of money should be included in the accounting records.