Makoto Auto Parts sells new parts for foreign automobiles to auto dealers.i (Click the icon to view additional information.)For late August and early September, shipping documents are billed on sales invoices asfollows:(Click the icon to view the list of sales invoices on which the shipping documents werebilled.)The August and September sales journals have the following information included:(Click the icon to view the information included in the August and September salesjournals.)Read the requirements.Requirement a. What are the accounting requirements for a correct sales cutoff?O A. A shipment should be recorded as a sale when control has been transferred to the buyer and collectability is reasonably assured.O B. A shipment should be recorded as a sale when the merchandise is received by the purchaser.O C. A shipment should be recorded as a sale when the payment for the merchandise has been received by the seller.O D. A shipment should be recorded as a sale when the merchandise is shipped.

In simple words sale should be recorded at the point when the ownership of the goods transferred to…

Requirement a. What are the accounting requirements for a correct sales cutoff? O A. A shipment should be recorded as a sale when control has been transferred to the buyer and collectability is reasonably assured. O B. A shipment should be recorded as a sale when the merchandise is received by the purchaser. O C. A shipment should be recorded as a sale when the payment for the merchandise has been received by the seller. OD. A shipment should be recorded as a sale when the merchandise is shipped.

Requirement a. What are the accounting requirements for a correct sales cutoff? O A. A shipment should be recorded as a sale when control has been transferred to the buyer and collectability is reasonably assured. O B. A shipment should be recorded as a sale when the merchandise is received by the purchaser. O C. A shipment should be recorded as a sale when the payment for the merchandise has been received by the seller. OD. A shipment should be recorded as a sale when the merchandise is shipped.

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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Similar questions

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
Goods or products a company owns and expects to sell to its customers A) Sales Merchandise Inventory C. Cost of goods sold Purchases
What is the normal balance of the contra-revenue accounts: Sales Return and Sales Discount and Allowances accounts?
How do you determine the invoice of merchandise returned?
Which of the following is not a characteristic of FOB Destination?A. The seller pays for shipping.B. The seller owns goods in transit.C. The point of transfer is when the goods leave the seller’s place of business.D. The point of transfer is when the goods arrive at the buyer’s place of business
What accounts are used to recognize a retailer’s purchase from a manufacturer on credit?A. accounts receivable, merchandise inventoryB. accounts payable, merchandise inventoryC. accounts payable, cashD. sales, accounts receivable
A receiving report is filled out when we receive: An inventory shipment from a vendor. Items that a customer is authorized to return from a previous sale. A payment on a customer's account. a and b only. Answer is not the First option!
When should revenue from the sale of merchandise normally be recognized? A)When the customer takes possession of the merchandise. B)When the customer takes possession of the merchandise, if sold for cash, or when payment is received, if sold on credit. C)Either on the date the customer takes possession of the merchandise or on the date on which the customer pays. D)When the customer pays for the merchandise.
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
With consignment sales, at the time of the sale to a third party: the consignee only records revenue the consignor only records revenue the customer records the sale the consignee and the consignor record revenue
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
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