12. On November 10 of the current year, Al-Kamil Co. sold carpet to a customer for OR 8,000 with credit terms 2/10, n/30. Al-Kamil uses the gross method of accounting for cash discounts. What is the correct entry for Al-Kamil on November 10? Select one: a. Accounts receivable 8,000 Sales 8,000 b. Accounts receivable 8,000 cash discounts 160 Sales 7,840 c. Accounts receivable 7,840 cash discounts 160 Sales 8,000 d. Accounts receivable 7,840 Sales 7,840

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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12.

On November 10 of the current year, Al-Kamil Co. sold carpet to a customer for OR 8,000 with credit terms 2/10, n/30. Al-Kamil uses the gross method of accounting for cash discounts.

What is the correct entry for Al-Kamil on November 10?

Select one:

a. Accounts receivable 8,000
Sales 8,000

b. Accounts receivable                          8,000
                cash discounts 160
                  Sales                                                            7,840

c. Accounts receivable 7,840
cash discounts 160
Sales 8,000

d. Accounts receivable 7,840
Sales 7,840

13.Al –Tawaan Plastics entered into a contract to install a pipeline for a fixed price of OR2,200,000. Al –Tawaan uses the cost recovery method of revenue recognition.

2017 2015 2016

Cost incurred 250,000 1,600,000 450,000

Estimated cost to complete 1,550,000 500,000 0

In 2015, Al –Tawaan would report (rounded to the nearest thousand) gross profit (loss) of:

Select one:

a. OR 56,000

b. OR 73,000

c. OR 0

d. OR (100,000)

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