Match each phrase with its definition. 1. The amount of time allowed by a seller before payment is due from the buyer 2. Refers to credit terms where goods in transit are owned by the seller 3. Calculated as net sales minus cost of goods sold 4. Purchaser's description of a cash discount received from a supplier of goods. 5. A method in which cost of goods sold is recorded only at the end of a period 6. The expense of purchasing and preparing the merchandise sold during a period 7. Time period in which a cash discount is available 8 Refers to credit terms where goods in transit are owned by the buyer

Match each phrase with its definition. 1. The amount of time allowed by a seller before payment is due from the buyer 2. Refers to credit terms where goods in transit are owned by the seller 3. Calculated as net sales minus cost of goods sold 4. Purchaser's description of a cash discount received from a supplier of goods. 5. A method in which cost of goods sold is recorded only at the end of a period 6. The expense of purchasing and preparing the merchandise sold during a period 7. Time period in which a cash discount is available 8 Refers to credit terms where goods in transit are owned by the buyer

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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b) Complete the following table to show how FOB terms apply to merchandise inventory purchased by a merchandiser. FOB Term When does the title to the Who pays the goods transfer to the buyer? freight? Shipping Point Destination c) Journalize the following transaction for a merchandiser that uses the perpetual inventory system. Sold goods for cash of $1,200 and on account of $800. Total cost $1,500. Omit explanations.
If a customer purchases merchandise on credit and returns the defective merchandise beforepayment, what accounts would recognize this transaction?A. sales discount, cashB. sales returns and allowances, cashC. accounts receivable, sales discountD. accounts receivable, sales returns and allowances
Which of the following needs an adjustment to the accounts receivable account of AB Company? a. a freight cost paid by the buyer for goods shipped FOB shipping point b. freight cost prepaid by the seller for good shipped FOB destination c. freight cost prepaid by the buyer for goods shipped FOB shipping point d. freight cost prepaid by the seller for goods shipped FOB shipping point
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
The "dual nature of merchandise transactions" as described in this chapter means every business transaction affects both a/an __________ and a/an ____________. Group of answer choices income statement; balance sheet debit entry and a credit entry buyer; seller asset; expense
When goods are delivered after an advance receipt of cash, Unearned Sales Revenue is debited. Cash is debited. Unearned Sales Revenue is credited. Sales Revenue is debited. choose the correct ans
Several accounts are listed below a. Purchases Returns and Allowances b. Sales Discounts c. Wages Expense d. Allowance for Doubtful Accounts e. Unearned Rent f. Income Taxes Payable g. Dividends Distributed h. Interest Revenue i. Inventory REQUIRED: List the accounts above that would normally have a credit balance
The amount recorded for net cost of purchases includes all of the following EXCEPT: Purchase discounts. Freight costs paid by the seller. Returns and allowances. Freight costs paid by the buyer.
The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit Accounts Payable. Purchase Returns and Allowances. Sales Revenue. Inventory.
Cost of goods sold is given by: Select one: a. Net Purchases + beginning inventory - ending inventory. b. Net purchases + ending inventory - beginning inventory. c. Beginning inventory + accounts payable - net purchases. d. Beginning inventory - net purchases + ending inventory.
Match each defınition with the term that best describes it. An income measure that includes gains and [ Choose ] [Choose ] Sales revenue (Sales) Expenses incurred in the process of earning sales revenue. losses that are excluded from the determination of net income. An account that is offset against a revenue Contra revenue account account on the income statement. Cost of goods sold Periodic inventory system FOB destination The total cost of merchandise sold during the Comprehensive income FOB shipping point Perpetual inventory system period. An inventory system under which the [ Choose ] company does not keep detailed inventory records throughout the accounting period but determines the cost of goods sold only at the end of an accounting period. An inventory system under which the [ Choose ] company keeps detailed records of the cost of each inventory purchase and sale, and the records continuously show the inventory that should be on hand. The primary source of revenue in a [ Choose…