When inventory is purchased on credit with terms FOB shipping point, what does the buyer do?     Responses The buyer receives a discount if payment is made before the goods leave the seller’s place of business. The seller bears the insurance expense of goods during transit. The buyer reports the liability when the goods reach the buyer’s place of business. The buyer reports the liability when the goods leave the seller’s place of business.

Q: List the steps to record sales under a perpetual inventory system as a buyer and a seller.

A: The accounting practice of perpetual inventory allows a company to keep continuous, real-time track…

Q: Mr. Mohammed use perpetual inventory system makes the following journal entry in his business Debit…

A: Merchadise inventory is debited and Accounts payable is credited where  inventory is purchased on…

Q: If a wholesale company provides a discount to NetSolutions for early payment of purchases of…

A: Purchase discount is discount availed by purchaser on early payment of purchases of merchandise on…

Q: Olga is the accountant at Schowalter incorporated responsible for inventory Schowalter incorporated…

A: Inventory is a current asset of the company. It consists of goods available for sale, goods in…

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: Determine which of the following statements about merchandise is correct.

A: Merchandise inventory: Merchandise inventory is the inventory purchased by company for the purpose…

Q: In the revenue cycle (for sales on credit), a customer places an order for a certain product. Which…

A: Every time an order is received by an organisation, there is whole set of process that needs to be…

Q: Match the accounting term with its correct definition. Question 1 options: 1. contains deductions…

A: Introduction:Periodic Inventory:The periodic inventory system is based on periodic reviews and…

Q: (To record sales returns) Accounts Receivable Purchase Returns and Allowances (To record cost of…

A: The procedure via which a customer returns previously acquired goods to a business is known as a…

Q: If a company uses a purchase discount account, the cost recorded when inventory is purchases is its

A: Detailed explanation:Purchase discount is the discount received when a company pays its account…

Q: When a proprietor takes goods for own use, we will record it as:…

A: Every transaction of business is recorded as journal entry in the books.

Q: What is another name for the bill that the seller sends to the buyer when the buyer purchases…

A: Solution: Purchase order is prepared and sent by buyer to seller while placing an order. Receiving…

Q: If the sale includes the seller paying the freight costs and assuming the responsibility for…

A: FOB shipping point sale: When the goods are shipped to the buyer, the title is transferred to the…

Q: Under the perpetual inventory system, in addition to making the entry to record a sale, a company…

A: Under perpetual inventory system, the decrease in inventory is also recorded every time of sale.

Q: Discuss the treatment of freight-in, purchase returns, purchase discounts, normal spoilage, sales…

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

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: Why should one not use a rent-to-own for mer

A: Rent - to- own: Rent-to-own (RTO) stores sell things like articles of furniture and appliances to…

Q: For sellers of goods, the revenue recognition principle generally requires that revenues be recorded…

A: The objective of the question is to understand when the revenue recognition principle allows sellers…

Q: Requirement a. What are the accounting requirements for a correct sales​ cutoff?     A. A shipment…

A: Revenue shall be recognition according to accounting standards. Following is the condition to…

Q: a debit to Accounts Payable and a credit to Merchand

A: A perpetual inventory system is an inventory management approach that uses an inventory management…

Q: Assuming a periodic inventory system is used, the entry to record a purchase of merchandise on…

A: Assuming a periodic inventory system is used, the entry to record a purchase of merchandise on…

Q: the discount that is being acquired

A: First option is wrong because the cash discount is the discount given by the seller to the buyer for…

Q: Sellers use two methods in practice that simplify the process of recording sales discount. What are…

A: Sales:   Sales is an activity of selling the merchandise inventory of a business.

Q: A receiving report is filled out when we receive: An inventory shipment from a vendor. Items that a…

A: Receiving Report is an internal document usually prepared by the Stores manager/Inventory…

Q: When should revenue from the sale of merchandise normally be recognized? A)When the customer takes…

A: Revenue recognition concept says that when all the risk and reward has been passed on to the buyer…

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