MGMT 30A Study Guide - Midterm Guide: Title Insurance, Accounts Receivable

• School: UC-Irvine
• Department: Management
• Course: MGMT 30A
• Professor: Kari- Lyn Williamson

Document Summary

Inventory turnover raio = cost of goods sold/average inventory. Accounts receivable turnover = net credit sales/average net accounts receivable. Return on assets = net income/average total assets. Proit margin x asset turnover = return on assets. Depreciaion method: straight line: depreciable base = cost salvage value. Sales returns discounts = net sales cost of goods sold = gross proit operaing expenses = net income. Tradiionally used for merchandise with high unit values, shows the quanity and cost of the inventory that should be on hand at any ime, provides beter control over inventories than a periodic system. Lifo is the cost low method that results in the lowest income taxes during a period of inlaion. Companies can write down the inventory to its market value in the period in which the price decline occurs. Market value = replacement cost >>example of conservaism. Understaing ending inventory will overstate cost of goods sold.