On July 2, we purchased merchandise on account for $15,000 with credit terms of 2/10, n/30. On
Question:
On July 2, we purchased merchandise on account for $15,000 with credit terms of 2/10, n/30. On July 5, we returned $3,000 of the merchandise inventory. On July 10, we paid the amount due. We use the perpetual inventory method. Record the journal entry to reflect the payment.
2. On May 2, we sell merchandise on account for $10,000 with credit terms of 3/10, n/90. On May 10, we receive the amount due. We use the periodic inventory method. The journal entry to reflect the receipt will include (select all that apply):
Question 2 options:
A credit to Sales Discounts | |
A debit to Sales Discounts | |
A credit to Cash | |
A credit to Sales | |
A credit to Accounts Receivable | |
A debit to Cash | |
A debit to Accounts Receivable | |
A debit to Sales |
3. Based on the following data, the amount of gross profit reported on a multi-step income statement would be:
Sales | $360,000 |
Sales Returns | 20,000 |
Cost of Goods Sold | 150,000 |
Selling Expenses | 40,000 |
Admin. and General Expenses | 80,000 |
Answer |
4. Elvis Co. purchased merchandise with terms of 2/10, n/30, FOB shipping point. Elvis Co. uses the perpetual inventory system. When Elvis Co. records the freight chargers it will:
Question 4 options:
A) | Decrease Merchandise Inventory | ||
B) | Increase Freight-in. | ||
C) | Do nothing because the freight charges are the seller's responsibility. | ||
D) | Increase Merchandise Inventory | ||
E) | Do nothing because the freight charges are the purchaser's responsibility. | ||
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen