Perpetual Inventory system: This method records the inventory and the cost of goods sold continuously on the occurrence of a sale or a purchase transaction. Gross Method: Under this method of accounting, sales are recorded at gross invoice value and if cash discount is availed by the customer, then accounts receivable are adjusted by passing an entry. Journal entries : It is the first and foremost step in maintaining books of accounts. Journal entries record the economic transactions made for the business in a chronological order. Credit terms: These are the agreed terms between the buyer and the seller and show the payment terms and the discount availed if the payment made timely, etc. Discount period: Discount period is the period during which the cash discount is available and the purchaser needs to pay the net invoice price i.e., invoice amount less discount. To Prepare: Journal entries for sales, sales return made and its receipt considering company using the gross method to record purchases and a perpetual inventory system.
Perpetual Inventory system: This method records the inventory and the cost of goods sold continuously on the occurrence of a sale or a purchase transaction. Gross Method: Under this method of accounting, sales are recorded at gross invoice value and if cash discount is availed by the customer, then accounts receivable are adjusted by passing an entry. Journal entries : It is the first and foremost step in maintaining books of accounts. Journal entries record the economic transactions made for the business in a chronological order. Credit terms: These are the agreed terms between the buyer and the seller and show the payment terms and the discount availed if the payment made timely, etc. Discount period: Discount period is the period during which the cash discount is available and the purchaser needs to pay the net invoice price i.e., invoice amount less discount. To Prepare: Journal entries for sales, sales return made and its receipt considering company using the gross method to record purchases and a perpetual inventory system.
Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.
Chapter 5, Problem 22QS
To determine
Concept Introduction:
Perpetual Inventory system:
This method records the inventory and the cost of goods sold continuously on the occurrence of a sale or a purchase transaction.
Gross Method:
Under this method of accounting, sales are recorded at gross invoice value and if cash discount is availed by the customer, then accounts receivable are adjusted by passing an entry.
Journal entries:
It is the first and foremost step in maintaining books of accounts. Journal entries record the economic transactions made for the business in a chronological order.
Credit terms:
These are the agreed terms between the buyer and the seller and show the payment terms and the discount availed if the payment made timely, etc.
Discount period:
Discount period is the period during which the cash discount is available and the purchaser needs to pay the net invoice price i.e., invoice amount less discount.
To Prepare:
Journal entries for sales, sales return made and its receipt considering company using the gross method to record purchases and a perpetual inventory system.
Greenfield Industries sells a product for $80 per unit. Variable costs
per unit are $50, and monthly fixed costs are $400,000.
What unit sales would be required to earn a target profit of
$260,000?
a) 18,000 units
b) 22,000 units
c) 21,000 units
d) 19,000 units
Total overhead variance is
The UPS Manufacturing Company has a predetermined overhead rate of $10, comprised of a variable overhead rate of $6 and a fixed rate of $4. The amount of budgeted overhead costs at normal capacity of $300,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $10. Actual overhead for July was $18,600 variable and $12,500 fixed, and standard hours allowed for the product produced in July was 3,500 hours. The total overhead variance is__.
Chapter 5 Solutions
Connect Access Card For Fundamental Accounting Principles