Shown below are selected transactions of Konshocks, a retail store that uses a perpetual inventory system. a.
Question:
Shown below are selected transactions of Konshock’s, a retail store that uses a perpetual inventory system.
a. Purchased merchandise on account.
b. Recognized the revenue from a sale of merchandise on account. (Ignore the related cost of goods sold.)
c. Recognized the cost of goods sold relating to the sale in transaction b.
d. Collected in cash the account receivable from the customer in transaction b.
e. Following the taking of a physical inventory at year-end, made an adjusting entry to record a normal amount of inventory shrinkage.
Indicate the effects of each of these transactions on the elements of the company’s financial statements shown below. Organize your answer in tabular form, using the column headings shown below. (Notice that the cost of goods sold is shown separately from all other expenses.) Use the code letters I for increase, D for decrease, and NE for noeffect.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello