answer correct What is the proper accounting treatment forvolume discounts earned after reaching purchasethresholds during an accounting period?a) Record as gain in the period receivedb) Reduce cost of inventory previously purchasedc) Credit revenue accountd) Defer until next accounting period

Explanation of Volume Discounts: Volume discounts are price reductions offered by suppliers when…

Answered: What is the proper accounting treatment…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 1QY: Which of the following is true about the Sales Returns and Allowances account? a. It is used to...

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Similar questions

What is the basic assumption underlying the gross profit method? How may the gross profit percentage for the prior year be modified to provide a better estimate of the inventory value?
Which of the following is accounted for prospectively? Change in reporting entity. Change in the percentage used to determine warranty expense. Correction of an error. Changes from the weighted-average method of inventory costing to FIFO.
Which of the following is indicative of discounts received from a supplier on account of volume of inventory purchased? a) Early settlement discountb) Value discountc) Quantity discount
The work paper in the year of sale to eliminate unrealized intercompany profit in ending: a. Credit to Ending Inventory (Cost of Sales) b. Debit to Ending Inventory (Cost of Sales) c. Debit to Inventory – Balance Sheet d. Credit to Sales
Which of the following is not included when computing Net Purchases?A. purchase discountsB. beginning inventoryC. purchase returnsD. purchase allowances
Which inventory method provides a better matching ofcurrent costs with sales revenue on the income statementbut also results in older values being reported for inventory on the balance sheet?
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…
What is the proper accounting for volume discounts onsales of products?
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…
1. Journalize the adjustment for inventory shrinkage. 2. Journalize the adjustment for estimated sales returns.
A company records inventory at gross invoice price. Theoretically, how should the following affect the cost of inventory? Interest on inventory loan Cash discount available Group of answer choices No effect No effect Increase No effect No effect Decrease Increase Decrease
For each change or error below, indicate how it would be accounted for. 1. Change due to understatement of inventory. options: A.) accounted for prospectively b.) prior period adjustment 2. change from direct write-off to allowance method of accounting for bad debts. Options: a.) accounted for retrospectively b.) prior period adjustment

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What is the proper accounting treatment for volume discounts earned after reaching purchase thresholds during an accounting period? a) Record as gain in the period received b) Reduce cost of inventory previously purchased c) Credit revenue account d) Defer until next accounting period