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Q. Explain about Cost of goods sold?
Cost of goods sold is the main expense in merchandising companies. Note the cost of goods sold segment of the classified income statement in Exhibit 39. This section has previously discussed the items used in calculating cost of goods sold. Merchandisers habitually highlight the amount by which sales revenues exceed the cost of goods sold in the top part of the income statement. The surplus of net sales over cost of goods sold is the gross margin or gross profit. To express gross margin as a percentage rate we divide gross margin by net sales. In Exhibit 39 the gross margin rate is approximately 39.3 per cent (USD 103,000/USD 262,000). The gross margin rate indicates that out of every sales dollar approximately 39 cents is available to cover other expenses as well as produce income. Business owners watch the gross margin rate closely since a small percentage fluctuation is able to cause a large dollar change in net income. As well a downward trend in the gross margin rate may indicate a problem such as theft of merchandise. For example one Southeastern sporting goods company SportsTown Inc suffered noteworthy gross margin deterioration from increased shoplifting and employee theft.
Q. Recording changes in revenues and expenses? Examine that Notes Payable, liabilities and increase with an entry on the right (credit) side of the account. Recording changes i
Why is a provision for depreciation made in the financial statements? A to charge the cost of non-current assets against profits B to make a provision for repairs C to mak
Q. Illustrate a sales cycle of company? When exploratory a company's management, sales cycle and users of financial data must be aware of any seasonal changes that may affect i
Gwinnett Park Co. reported net income of $506,600 for its fiscal year ended September 30, 2014 . At the beginning of that year, 150,000 shares of common stock were outstanding. On
Q. What are Accrued items explain with example? Delayed items consist of two types of adjusting entries asset/expense adjustments and liability/revenue adjustments. For instanc
Money payable by customers (individuals or corporations) to the other entity in exchange for goods or services that have been given or used, but not yet paid for. Receivables typic
User accounts are the primary means of access for actual people to the system (computer), and these accounts insulate the user and the environment, preventing the users from damagi
Q. Define the Product costs? Product costs are costs earns in the acquisition or manufacture of goods. Since you will see in the next section included as product costs for purc
Question: Part A: Briefly explain the term "depreciation" and give three reasons why do we need to provide for depreciation on fixed assets during a financial year. Part
Uses of cash flow statements: The main usefulness of cash flow analysis is that it facilitates the Finance manager to approximation the cash necessities of the firm and match t
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