Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book
6th Edition
ISBN: 9781119191674
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 1Q
(a)
To determine
Explain whether the steps in accounting cycle for a merchandising company differs from the steps in the accounting cycle for a service company.
(a)
Expert Solution
Answer to Problem 1Q
No, the steps in accounting cycle for a merchandising company does not differ from the steps in the accounting cycle for a service company.
Explanation of Solution
Accounting cycle refers to the process of recording, posting, and preparing financial statements of a company. It shows the processing of the financial transactions in sequence that starts from occurrence of the transactions and ends with the preparation of financial statements.
The steps in the accounting cycle that is same for both Merchandise Company, and Service Company are stated below:
- Analyze and record transactions in the journal.
Post the journals entries to the ledger (T-accounts).- Prepare a
trial balance . - Prepare financial statements.
- Prepare closing entries.
(b)
To determine
Explain whether the measurement of net income in a merchandising company conceptually the same as in a service company.
(b)
Expert Solution
Answer to Problem 1Q
Yes, the measurement of net income in a merchandising company is conceptually same as in a service company.
Explanation of Solution
The net income in both the companies is derived by deducting all the expenses from the total revenue earned during a year.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
If a company has sales revenue of $120,000, cost of goods sold of $70,000, and operating expenses of $20,000, what is the net income? Correct Answer
If a company has sales revenue of $120,000, cost of goods sold of $70,000, and operating expenses of $20,000, what is the net income? Financial Accounting
A company’s beginning inventory is $13,000, purchases during the period are $33,000, and the ending inventory is $9,500. What is the cost of goods sold (COGS)? General Accounting
Chapter 5 Solutions
Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Prob. 5QCh. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Prob. 15QCh. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - Prob. 18QCh. 5 - Prob. 19QCh. 5 - Prob. 20QCh. 5 - Prob. 21QCh. 5 - Prob. 22QCh. 5 - Prob. 23QCh. 5 - Prob. 24QCh. 5 - Prob. 25QCh. 5 - Prob. 26QCh. 5 - Prob. 1BECh. 5 - Prob. 2BECh. 5 - Prob. 3BECh. 5 - Prob. 4BECh. 5 - Prob. 5BECh. 5 - Prob. 6BECh. 5 - Prob. 7BECh. 5 - Prob. 8BECh. 5 - Prob. 9BECh. 5 - Prob. 10BECh. 5 - Prob. 11BECh. 5 - Prob. 12BECh. 5 - Prob. 13BECh. 5 - Prob. 14BECh. 5 - Prob. 1DIECh. 5 - Prob. 2DIECh. 5 - Prob. 3DIECh. 5 - Prob. 4DIECh. 5 - Prob. 5DIECh. 5 - Prob. 6DIECh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Prob. 5ECh. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Prob. 10ECh. 5 - Prob. 11ECh. 5 - Prob. 12ECh. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 1APCh. 5 - Prob. 2APCh. 5 - Prob. 3APCh. 5 - Prob. 4APCh. 5 - Prob. 5APCh. 5 - Prob. 6APCh. 5 - Prob. 7APCh. 5 - Prob. 8APCh. 5 - Prob. 9APCh. 5 - Prob. 1CACRCh. 5 - Prob. 2CACRCh. 5 - Prob. 1EYCTCh. 5 - Prob. 2EYCTCh. 5 - Prob. 3EYCTCh. 5 - Prob. 4EYCTCh. 5 - Prob. 6EYCTCh. 5 - Prob. 7EYCTCh. 5 - Prob. 8EYCTCh. 5 - Prob. 9EYCTCh. 5 - Prob. 1IFRSCh. 5 - Prob. 2IFRSCh. 5 - Prob. 3IFRSCh. 5 - Prob. 4IFRS
Knowledge Booster
Similar questions
- Data for the two departments of Kimble & Pierce Company for June of the current fiscal year are as follows: Drawing Department Winding Department Work in process, June 1 Completed and transferred to next 7,400 units, 30% completed 2,900 units, 60% completed 101,400 units 100,400 units processing department during June Work in process, June 30 5,600 units, 75% completed 3,900 units, 30% completed Production begins in the Drawing Department and finishes in the Winding Department. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for June for the Winding Department.arrow_forwardGeneral Accountingarrow_forwardFinancial Accounting please answer the questionarrow_forward
- A business purchases equipment for $25,000, paying $6,000 in cash and signing a note payable for the remainder. What amount should be recorded as a liability?HELParrow_forwardMyrna and Geoffrey filed a joint tax return in 2017. Their AGI was $85,000, and itemized deductions were $13,700, which included $4,000 in state income tax. In 2018, they received a $1,800 refund of the state income taxes that they paid in 2017. The standard deduction for married filing jointly in 2017 was $12,700. Under the tax benefit rule, how much of the state income tax refund is included in gross income in 2018?(General Account)arrow_forwardAssume the company uses variable costing. Determine its product cost per unit.arrow_forward
- Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,400 units. The costs and percentage completion of these units in the beginning inventory were: Cost Percent Complete Materials costs $ 7,700 65% Conversion costs $ 8,800 45% A total of 10,500 units were started and 7,900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 1,27,500 Conversion costs $2,09,000 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. What are the equivalent units for conversion costs for the month in the first processing department?arrow_forwardGive me answerarrow_forwardCool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 42,000 units and sold 34,000 units at a price of $120 per unit Manufacturing costs Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year $ 48 $ 18 $ 6 $ 4,20,000 Selling and administrative costs Variable selling and administrative cost per unit Fixed selling and administrative cost per year $ 11 $ 1,05,000 Assume the company uses variable costing. Prepare its income statement for the year under variable costing.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
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:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education