Answered: 2. Purchases of merchandise inventories…

2. Purchases of merchandise inventories are always recorded net of: a) Trade discount b) Cash discount c) Sales discount d) Purchase discount

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 8MC: Which of the following is not included when computing Net Purchases? A. purchase discounts B....

See similar textbooks

Related questions

Q: Which account balance is NOT used to compute the cost of goods sold? a.Merchandise Inventory…

A: Formula: Cost of goods sold = Beginning Merchandise inventory + Net Purchases - Ending Merchandise…

Q: When a product is sold on credit, which account should be debited for the seller? A.cash…

A: Sale of a product means to sell the goods in stock to the customer. It can be sold either on cash or…

Q: the following is not considered in computing net cost of purchases? Purchases Purchase Returns and…

A: Solution: "Transportation paid on goods shipped to customers" is not considered in computing net…

Q: The journal entry to record the payment of merchandise on account with a discount under the Periodic…

A: Periodic inventory method: It is a inventory valuation method. In this method inventory account is…

Q: Under a perpetual inventory system, acquisition of merchandise for resale is debited to the…

A: Inventory accountExplanation:Under a perpetual inventory system, acquisition of merchandise for…

Q: Using a perpetual inventory system, the sale of inventory on account would be recorded as a. Debit…

A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…

Q: 2. The entry to record the return of $25 of inventory to a supplier under the perpetual inventory…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Using a perpetual inventory system, the purchase of inventory on account would be recorded as a.…

A: Under perpetual inventory system, when inventory are purchased on account, then purchases account is…

Q: When purchases of merchandise are made on account with a perpetual inventory system, the transaction…

A: Perpetual inventory system: It is a method of inventory management that records real time…

Q: Mcq In a perpetual inventory system, the amount of the discount allowed for paying for merchandise…

A: Perpetual inventory system is an inventory system in which all transactions related to inventory are…

Q: Under the perpetual inventory system, a company purchases merchandise on terms 2/10, n/30. The entry…

A: Inventory system of book keeping means where proper books of account relating to inventory has been…

Q: The primary purpose for using an inventory cost flowassumption is to:a. Parallel the physical flow…

A: Inventory cost flow assumptions: These are the assumptions including FIFO, LIFO, and weighted…

Q: 1. Which of the following accounts are used when recording the sales entry of a sale on credit?e A.…

A: Sales is a revenue account and all revenues increase when credited. Accounts receivable is an Asset…

Q: The price a business pays for goods it purchases to sell is called: A. markup B. purchase price C.…

A: Any item that is displayed for sale and intended to be sold to customers in exchange for a profit is…

Q: Describe the accounting treatment for merchandise returns.

A: Purchase returns: Purchase returns are the goods returned by the buyer out of the goods purchased.…

Q: 3. Give at least one example of each Merchandise transaction for a) Receipt b) Sales Invoice…

A: Merchandise transaction means transaction related to purchase and sale of inventory.

Q: Match each phrase with its definition. 1. Seller's description of a cash discount granted to buyers…

A: Discount is the amount of deduction or allowance that is being given to the buyer for purchasing…

Q: What accounts are used to recognize a retailer’s purchase from a manufacturer on credit?A. accounts…

A: Purchase of goods on credit means inventory has been purchased but payment has not been made yet.…

Q: Using a perpetual inventory system, the entry to record the sale of merchandise on account includes…

A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…

Q: The amount recorded for net cost of purchases includes all of the following EXCEPT: Purchase…

A: Purchase refers to a transaction that results in an acquisition of an item. This transaction…

Q: The journal entry to record a return of merchandise purchased on account under a perpetual inventory…

A: (1) Debit what comes in, Credit what goes out.(2) Debit all expenses and losses, Credit all incomes…

Q: Cost of goods sold is given by:

A: Cost of goods sold: Cost of goods sold is the total of all the expenses incurred by a company to…

Q: The uses of a Purchase Discounts Lost account implies that the recorded cost of a purchase inventory…

A: Purchase discount lost: Purchase discount lost is recorded when payment is not made to the supplier…

Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

2. Purchases of merchandise inventories
are always recorded net of:
a) Trade discount
b) Cash discount
c) Sales discount
d) Purchase discount

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1Basic Information

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following accounts are used when recording a purchase using a periodic inventory system? A. cash, purchases B. accounts payable, sales C. accounts payable, accounts receivable D. cash, merchandise inventory
Which of the following is an example of a contra revenue account? A. sales B. merchandise inventory C. sales discounts D. accounts payable
What is the normal balance for each of the following accounts: (a) Purchases? (b) Sales Discounts? (c) Purchases Returns and Allowances? (d) Sales? (e) Purchases Discounts? (f) Sales Returns and Allowances?
Which of the following accounts are used when recording a purchase? A. cash, merchandise inventory B. accounts payable, merchandise inventory C. A or B D. cash, accounts payable
1. Net purchases equal the invoice amount and?a. plus freight-in, plus discountsb. less purchase returns, plus purchase allowancec. plus freight-in, less purchase discountsd. plus discounts, less purchase returns 2. Cost of Goods Sold is classified as which type of account?a. Assetb. Liabilityc. Revenued. Expense
Mcq In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited by the buyer to Inventory. Purchase Discounts. Purchase Allowance. Sales Discounts.
Decreases in the seller's receivable from a customer's return of merchandise or from granting the customer an allowance from the amount owed to the seller. Select one: O a. Freight Out b. Purchases Discount and Allowances c. Freight In d. Sales Discount and Allowances
Terminology Match each phrase with its definition. A. Sales discount B. Credit period C. Discount period D. FOB destination E. FOB shipping point F. Gross profit G. Merchandise inventory H. Purchases discount 1. 2. 3. 4. 5. 6. 7. 8. Goods a company owns and expects to see to its customers. Time period that can pass before a customer's full payment is due. Seller's description of a cash discount granted to buyers in return for early payment. Ownership of goods is transferred when the seller delivers goods to the carrier. Purchaser's description of a cash discount received from a supplier of goods. Difference between net sales and the cost of goods sold. Time period in which a cash discount is available. Ownership of goods is transferred when delivered to the buyer's place of business. 1
a. Added to other income. whether taken or not b. Added to other income, only if taken Deducted from inventory, whether taken or not d. Deducted from inventory, only if taken C. accounted for in the computation of cost of goods sold? a. Trade discounts applicable to purchases b. Cash discounts taken- c. Purchase returns and allowances d. Cost of transportation for merchandise purchased 3. The use of purchase discount account implies that the recorded cost of a purchased inventory is a. Invoice price b. Invoice price plus any purchase discount lost c. Invoice price less the purchase discount taken d. Invoice price less the purchase discount allowable whether taken or not 4. The use of a discount lost account implies that cost of a purchased inventory is a. Invoice price b. List price c. Invoice price less the purchase discount taken d. Invoice price less the purchase discount allowable whether or not taken 5. The valuation of inventory on a prime cost basis a. Would achieve the same…
The classification and normal balance of the sales discount account would be A. expense and debit B. revenue and credit C. contra revenue and debit D. asset and debit
4. Which of the following accounts are used when recording a purchase? A. cash, merchandise inventory B. accounts payable, merchandise inventorye C. A or B D. cash, accounts payable“
The trade discount on purchases is recorded A. O When it is received B.When the inventory is purchased C.When the inventory is sold D. O Not at all recorded in the books