
Concept explainers
Sales Discount:
Sales discount is the discount given by the seller to the buyer when the buyer agrees to make the early payment of the goods he bought from the seller.
Credit Period:
It a time period which can pass before the payment is due. It is the time period agreed by both parties that are buyer and seller set up for credit terms.
Discount Period:
Time period in which the customer can avail the cash discount is called discount period. It is the period given to avail cash discount, if the buyer makes the payment in that due period.
Free on Board (FOB) Destination:
The ownership of the good is transferred after the goods are delivered to the buyers address. Seller has the full responsibility of the goods and has to reimburse the amount if any of the goods gets defected.
Free on Board (FOB) Shipping Point:
The ownership of the goods is transferred before the goods are shipped to the buyer. Here, the seller isn’t responsible if the goods get destroyed during the course of delivery.
Gross Profit:
Gross profit is the difference between net sales revenue of the business and the cost of goods sold incurred to earn that revenue. It is the profit after deducting the expenses and cost incurred by the company to make it and sell it afterwards.
Merchandise Inventory:
These are the goods that a company produces and owns and then sell them to the customers. It is an asset. The right amount of inventory helps to improve efficiency of the business.
Purchases Discount:
It is the discount offered by seller to avail it buyer’s promises to pay the amount in a certain time period decided by the seller.
Cash Discount:
It is the discount given by the seller in order to persuade the customer to make the payment in a certain time period.
Trade Discount:
It is the discount that is negotiates at the time of selling the goods. It is the discount given to those people who buy the goods or product in bulk such as retailers, whole sellers.
To Identify: The letter for each definition.

Want to see the full answer?
Check out a sample textbook solution
Chapter 4 Solutions
FINANCIAL & MANAGERIAL ACCOUNTING
- incoporate the accounting conceptual frameworksarrow_forwarda) Define research methodology in the context of accounting theory and discuss the importance of selecting appropriate research methodology. Evaluate the strengths and limitations of quantitative and qualitative approaches in accounting research. b) Assess the role of modern accounting theories in guiding research in accounting. Discuss how contemporary theories, such as stakeholder theory, legitimacy theory, and behavioral accounting theory, shape research questions, hypotheses formulation, and empirical analysis. Question 4 Critically analyse the role of financial reporting in investment decision-making, emphasizing the qualitative characteristics that enhance the usefulness of financial statements. Discuss how financial reporting influences both investor confidence and regulatory decisions, using relevant examples.arrow_forwardFastarrow_forward
- CODE 14 On August 1, 2010, Cheryl Newsome established Titus Realty, which completed the following transactions during the month: a. Cheryl Newsome transferred cash from a personal bank account to an account to be used for the business in exchange for capital stock, $25,000. b. Paid rent on office and equipment for the month, $2,750. c. Purchased supplies on account, $950. d. Paid creditor on account, $400. c. Earned sales commissions, receiving cash, $18,100. f. Paid automobile expenses (including rental charge) for month, $1,000, and miscel- laneous expenses, $600. g. Paid office salaries, $2,150. h. Determined that the cost of supplies used was $575. i. Paid dividends, $2,000. REQUIREMENTS: 1. Determine increase - decrease of each account and new balance 2. Prepare 3 F.S: Income statement; Retained Earnings Statement; Balance Sheet Scanned with CamScannerarrow_forwardAssume that TDW Corporation (calendar-year-end) has 2024 taxable income of $952,000 for purposes of computing the §179 expense. The company acquired the following assets during 2024: (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,250 263,325 880,425 $ 3,414,000 b. What is the maximum total depreciation, including §179 expense, that TDW may deduct in 2024 on the assets it placed in service in 2024, assuming no bonus depreciation? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Maximum total depreciation deduction (including §179 expense)arrow_forwardEvergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Use MACRS Table 1 and Table 2.) Date Placed in Asset Machinery Service October 25 Original Basis $ 120,000 Computer equipment February 3 47,500 Used delivery truck* August 17 Furniture April 22 60,500 212,500 The delivery truck is not a luxury automobile. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. b. What is the allowable depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation and elects out of §179 expense?arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





