Cost of merchandise available for sale............................ 11,200
Date: 2015-10-07; view: 471.
Merchandise, at end of period (assume)......................... l,900
Cost of merchandise sold during period ....................... $ 9 300
Other adjunct and contra accounts frequently used are "Sales Returns and Allowances," "Purchases Discount," "Allowance for Uncollectibles," and "Discount on Capital Stock." They are used to reveal details of economic activities.
Account Numbering. Because account titles require time to write out, need space, and are sometimes cumbersome, a firm, especially a medium-sized or large corporation, may substitute numbers for account titles to facilitate the manual recording process. Various numbering schemes are in use, according to the needs of the individual company.
Supplementary Data. A signal characteristic of business activity seems to be an ever increasing need for information. As this need for more and more information pressed upon accountants, it became apparent that supplementary data not contained in the manually maintained ledgers should be included in accounting reports. In response to this need it has become customary to include in income statements and balance sheets such non-ledger information as the current market value of merchandise on hand, the specific dates when long-term liabilities are due for payment, contingent liabilities of the company, and authorized capital stock.
Notes:
| account | - рахунок (бухгалтерського обліку); |
| adjunct account = absorption account | - рахунок, що поглинає (кредитується щомісячно на рівні суми); |
| depreciation | - обезцінення, зниження вартості, амортизаційні відрахування; |
| accumulated depreciation = accrued depreciation | - амортизаційний резерв; акумульовані амортизаційні відрахування; |
| offsetting | - компенсація, відшкодування; |
| freight | - фрахт, вартість перевезення; вантаж; |
| typify | - символізувати, служити типовим прикладом; |
| sales returns | - виручка (прибуток) з продаж; |
| allowance | - знижка; |
| purchases discount | - знижка на покупки; |
| cumbersome | - громіздкий, важкий; |
| contingent liabilities | - потенційні зобов'язання; pl. зобов'язання, що з'являються в результаті виконаних операцій; |
| authorized capital stock | - уставний капітал |
Answer the following questions:
1. Which accounts should be selected?
2. Which accounts may be less informative?
3. What can be said about the criteria for selecting the number and types of accounts?
4. Why are adjunct and contra accounts added?
5. Give some illustrations of additional accounts.
6. Why is it necessary to introduce account numbering?
7. Why has it become customary to include in income statements and balance sheets some non-ledger information?
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