Merchandising Transactions You are working as a summer intern for AAA Auditing, Inc. You have been asked to help resolve discrepancies noted in the audit for Dolfin Corporation, a retailer of specialty aquarium supplies. As a retail company, Dolfin Corporation uses the perpetual inventory system. To prepare for this assignment, you have been asked to review your knowledge of sales a purchase transactions by completing the following table. Consider the effect of each transaction on the three accounts listed, and identify which accounts are debited or credited. If not affected by the transaction, select "No Effect". Purchase of merchandise for resale Cash sale of merchandise Customer returns Inventory Debit Credit Debit Estimated Returns Inventory Cost of Goods Sold Yearly estimate for customer returns Freight paid for merchandise purchased FOB shipping point Debit Return of merchandise purchased for resale x Freight paid for sales with FOB destination Sale on account Credit Customer payment on account No Effect No Effect No Effect Payment of service fee for processing credit card sales No Effect No Effect No Effect x

Merchandising Transactions You are working as a summer intern for AAA Auditing, Inc. You have been asked to help resolve discrepancies noted in the audit for Dolfin Corporation, a retailer of specialty aquarium supplies. As a retail company, Dolfin Corporation uses the perpetual inventory system. To prepare for this assignment, you have been asked to review your knowledge of sales a purchase transactions by completing the following table. Consider the effect of each transaction on the three accounts listed, and identify which accounts are debited or credited. If not affected by the transaction, select "No Effect". Purchase of merchandise for resale Cash sale of merchandise Customer returns Inventory Debit Credit Debit Estimated Returns Inventory Cost of Goods Sold Yearly estimate for customer returns Freight paid for merchandise purchased FOB shipping point Debit Return of merchandise purchased for resale x Freight paid for sales with FOB destination Sale on account Credit Customer payment on account No Effect No Effect No Effect Payment of service fee for processing credit card sales No Effect No Effect No Effect x

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 2TP: You have decided to open up a small convenience store in your hometown. As part of the initial...

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