Options Column (a): Contra Sales, Liability, Revenue, Expense, Asset

Options Column (b): Cash, Accounts Payable, Accounts Receivable, Sales, Freight Out, Sales Return and Allowance, Inventory, Cost of Goods Sold

Options Column (c): $ Amount

Second Side is based on Account Credited...

Options Column (a): Contra Sales, Liability, Revenue, Expense, Asset

Options Column (b): Cash, Accounts Payable, Accounts Receivable, Sales, Freight Out, Sales Return and Allowance, Inventory, Cost of Goods Sold

Options Column (c): $ Amount

Transcribed Image Text:

Listed below are selected examples of transactions related to the purchase and sale of inventory from the perspective of the seller or the buyer as indicated. Assume a perpetual inventory system is in use. 1. Buyer: Purchase of $3,570 of inventory for cash. 2. Buyer: Return of $765 of inventory to seller for credit on account. 3. Buyer: Purchase of $4,080 of inventory on account, terms 2/10, n/45. 4. Buyer: Payment of $430 cash for freight on purchase of inventory (FOB shipping point). 5. Buyer: Payment of amount owed for purchase of $3,570 of inventory, terms 2/10, n/30, paid within discount period. Seller: Sale of inventory on account, terms n/30. Selling price $20,000; cost $8,000. Management expects a return rate of 6. 7.69%. Seller: Return of damaged inventory from buyer for cash. Selling price $550; cost $231. All of the goods were discarded 7. because they are not resaleable. 8. Seller: Payment of $590 cash for freight on sale of inventory (FOB destination). Seller: Return of unwanted inventory from buyer for credit on account. Selling price $430; cost $161. Goods restored to 9. inventory for future resale. 10. Seller: Receipt of payment ($8,160) from customer on account, terms n/30. (a) the basic type (asset, liability, revenue, or expense) of each account to be debited and credited; (b) the specific name(s) of the account(s) to debit and credit (for example, Inventory); and (c) whether each account is increased (+) or decreased (-) and by what amount. The first one has been done for you as an example. (Enter specific debited account items in alphabetical order. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) For each of the above transactions, indic Listed below are selected examples of transactions related to the purchase and sale of inventory from the perspective of the seller or the buyer as indicated. Assume a perpetual inventory system is in use. 1. Buyer: Purchase of $3,570 of inventory for cash. 2. Buyer: Return of $765 of inventory to seller for credit on account. 3. Buyer: Purchase of $4,080 of inventory on account, terms 2/10, n/45. 4. Buyer: Payment of $430 cash for freight on purchase of inventory (FOB shipping point). 5. Buyer: Payment of amount owed for purchase of $3,570 of inventory, terms 2/10, n/30, paid within discount period. Seller: Sale of inventory on account, terms n/30. Selling price $20,000; cost $8,000. Management expects a return rate of 6. 7.69%. Seller: Return of damaged inventory from buyer for cash. Selling price $550; cost $231. All of the goods were discarded 7. because they are not resaleable. 8. Seller: Payment of $590 cash for freight on sale of inventory (FOB destination). Seller: Return of unwanted inventory from buyer for credit on account. Selling price $430; cost $161. Goods restored to 9. inventory for future resale. 10. Seller: Receipt of payment ($8,160) from customer on account, terms n/30. (a) the basic type (asset, liability, revenue, or expense) of each account to be debited and credited; (b) the specific name(s) of the account(s) to debit and credit (for example, Inventory); and (c) whether each account is increased (+) or decreased (-) and by what amount. The first one has been done for you as an example. (Enter specific debited account items in alphabetical order. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) For each of the above transactions, indic

Answer rating: 100% (QA)

i In item 5 buyer gets discount as he pays within the discount period ii So discount is recorded as ... View the full answer