What effects on a retail store's accounting equation occur when merchandise returned by customers is recorded?

Q: For each of the following accounts used by a retail business, determine its classification: asset,…

A: Contra assets are those whose accounts balance is credit. Generally, all asset accounts show debit…

Q: In the preparation of the worksheet of a merchandising business, the ending balance of the…

A: Merchandise inventory is the current assets, goods purchased or manufactured with the purpose of…

Q: Which type of company would report merchandise inventory as a line item on their balance sheet?…

A: Inventory: It can be defined as all the goods, items, materials, and merchandise that are held by a…

Q: What accounts would you see on a Balance Sheet and/or Income Statement, if a company had inventory?

A: The objective of the question is to identify the accounts that would appear on a company's Balance…

Q: When does a company typically recognize revenue for a bill-and-hold sale?

A: Bill and hold agreements represent a sales arrangement in which the buyer pays for the item or items…

Q: What inventory systems do you know are used in a buying and selling business?

A: The inventory systems popularly used are the  1) Perpetual inventory system  2) Periodic inventory…

Q: How is merchandise inventory classified on the balance sheet and what is its normal balance of…

A: Merchandise inventory is a current Asset as it is expected to be sold within 12 months from the…

Q: How would you find the invoice amount of merchandise that was returned in

A: When the merchandise is returned, The invoice amount of return will be credited to the customer's…

Q: When recording a purchase of inventory on credit, which accounts are typically affected? A) Debit…

A: When assets or expenses increases it should be debited and when decreases it should be…

Q: Under what conditions should a company disclose the amount of sales from a major customer?

A: Sales: A sale refers to a transaction that take place between two parties where a buyer receives…

Q: Is there a significant difference between adjusting and closing for a service firm and a merchandise…

A: Merchandise Company is a company that purchases finely finished goods and commodities and later…

Q: What is Target’s policy with respect to accounting for merchandise returns?

A: Financial Statements: Financial statements are a group or reports that present the financial…

Q: comparing the accounts of a merchandising company with those of a service company, what additional…

A: Merchandise company sales goods to customers while service company provide services to customer and…

Q: What inventory accounts are used by a manufacturer? In what financial statement will appear?

A: An inventory account or merchandise inventory account is an account to record the inventory…

Q: Goods or products a company owns and expects to sell to its customers A) Sales B Merchandise…

A: Answer -  Merchandise Inventory -  Merchandise inventory means the value of goods in stock, it can…

Q: inventory that it previously purchased. The entry to record that transaction should be: Group of…

A: The journal entries are prepared to record daily transactions of the business.

Q: What are the differences between accounting for service companies and accounting for merchandise…

A: The Answer :

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is