2 ook Taylor Company purchased $9,000 of inventory under terms FOB shipping point. Freight cost amounted...

  

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2 ook Taylor Company purchased $9,000 of inventory under terms FOB shipping point. Freight cost amounted to $300. The cost of inventory and freight were paid with cash. Which of the following shows how the recognition of this purchase, including freight costs if applicable, will affect Taylor's financial statements? Assets Cash + Inventory = A. (9,000) 9,000 B. (9,300) 9,300 C. (9,300) 9,300 D. (9,300) 9,300 Balance Sheet + Liabilities Accounts Payable n/a n/a n/a n/a Stockholders' Equity + Common Stock + n/a n/a n/a n/a Retained Earnings n/a (9,300) n/a (300) When a merchandising company sells inventory, it will Multiple Choice recognize only an expense. recognize only revenue. recognize revenue and expense. not recognize revenue or expense. 2 ook Taylor Company purchased $9,000 of inventory under terms FOB shipping point. Freight cost amounted to $300. The cost of inventory and freight were paid with cash. Which of the following shows how the recognition of this purchase, including freight costs if applicable, will affect Taylor's financial statements? Assets Cash + Inventory = A. (9,000) 9,000 B. (9,300) 9,300 C. (9,300) 9,300 D. (9,300) 9,300 Balance Sheet + Liabilities Accounts Payable n/a n/a n/a n/a Stockholders' Equity + Common Stock + n/a n/a n/a n/a Retained Earnings n/a (9,300) n/a (300) When a merchandising company sells inventory, it will Multiple Choice recognize only an expense. recognize only revenue. recognize revenue and expense. not recognize revenue or expense.

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