Answered: True or false 1. The sellers and buyers…

Business

Accounting

True or false 1. The sellers and buyers are required to record trade discounts

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: 29 - How are purchase refunds recorded to which account? A) From the purchase to the debt of the…

A: Purchase returns are always in a nature of returns made to the sellers and thus decreasing the…

Q: Mr. Mohammed use perpetual inventory system makes the following journal entry in his business Debit…

A: Merchadise inventory is debited and Accounts payable is credited where inventory is purchased on…

Q: 4-Which account will be credited to record the Sale of merchandise on credit under periodic…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: FOB destination of a Merchandise Business means: a. Goods are placed free on board to the buyer's…

A: Free on broad (FOB) is a term indicating whether the seller or the buyer will bear the loss and…

Q: Which of the following will be called as an expense of a Merchandise business? a. Sale of…

A: a.) Sale of merchandise inventory means sales of goods so it is and income. b.) Trade discount is…

Q: When merchandise purchased on account is returned under the perpetual inventory system, the buyer…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: The elimination entry under the perpetual inventory system for intercompany sales is a debit to…

A: SOLUTION- THE ELIMINATION ENTRY REMOVES IC SALES FROM THE CONS. UNIT (VENDOR) AND IC PURCHASE FROM…

Q: Which of the following indicates that ownership of the purchased items changes as soon as the goods…

A: FOB point is the term which is used to determine when the ownership of the goods changes hand. FOB…

Q: SLO-5.2. Using the term means that the buyer will pay the freight charges of the merchandise to the…

A: whenever the goods are purchased at the raw material for the production of goods are purchase there…

Q: If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,…

A: Free on Board is a trade term used to indicate whether the buyer or the seller is liable for goods…

Q: What happens when merchandise is delivered FOB shipping point? Multiple Choice O O O O The buyer…

A: Ans. The buyer pays the freight cost

Q: Determine which of the following statements about merchandise is correct.

A: Merchandise inventory: Merchandise inventory is the inventory purchased by company for the purpose…

Q: Match each phrase with its definition. 1. Refers to credit terms where goods in transit are owned by…

A: Below is the definition of each phrase:

Q: Match the accounting term with its correct definition. Question 1 options: 1. contains deductions…

A: Introduction:Periodic Inventory:The periodic inventory system is based on periodic reviews and…

Q: FOB destination of a Merchandise Business means: a. Seller is not responsible for the goods b. Buyer…

A: Whenever business sells goods to the customer, then there can be two type of terms. One is FOB…

Q: It is used to show who is responsible for paying for shipping and when the title of the goods passes…

A: Payment term used to show who is responsible for paying for shipping and when the title of the goods…

Q: Sayers Co. sold merchandise on account to a customer for $90,000 terms 1/10, n/30. The cost of the…

A: Journal: Recording of a business transactions in a chronological order.

Q: QUESTION 6 When a buyer returns merchandise purchased on account, the buyer will record the…

A: Inventory refers to stock held by an organisation in form of raw material or Work in process, or…

Q: When a proprietor takes goods for own use, we will record it as:…

A: Every transaction of business is recorded as journal entry in the books.

Q: 4. Which of the following accounts are used when recording a purchase?

A: 1. If Cash purchase: If the purchase is made out of cash, both cash and inventory accounts are used…

Q: What is another name for the bill that the seller sends to the buyer when the buyer purchases…

A: Solution: Purchase order is prepared and sent by buyer to seller while placing an order. Receiving…

Q: When merchandise that was sold is returned, a credit to sales returns and allowances is made by the…

A: As per perpetual inventory system, inventory records are updated after every transaction. When…

Q: 6-Which of the following document will be raised by the supplier at the time of Merchandise sales…

A: Introduction: Credit sales: When goods sold on credit basis called as credit sales. The buyer…

Q: If the sale includes the seller paying the freight costs and assuming the responsibility for…

A: FOB shipping point sale: When the goods are shipped to the buyer, the title is transferred to the…

Q: If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,…

A: FOB means freight on board FOB shipping point means the buyer is the legal owner of the goods when…

Q: Amex Stores should include which of the following items in its inventory at the statement of…

A: solution concept we should always consider the following points while valuing the inventory goods…

Q: d. ayable 13. If title to merchandise purchases passes to the buyer when the goods are delivered to…

A: Introduction to Merchandise Merchandise is referred to as the inventory is a good or product that a…

Q: On September 1, Ayayai Office Supply had an inventory that included a variety of calculators. The…

A: Answer - Journal Entry in Perpetual Inventory System - Under the perpetual inventory method, each…

Q: Match each phrase with its definition. 1. The amount of time allowed by a seller before payment is…

A: Discount is the amount of deduction or allowance that is being given to the buyer for purchasing…

Q: For sellers of goods, the revenue recognition principle generally requires that revenues be recorded…

A: The objective of the question is to understand when the revenue recognition principle allows sellers…

Q: n records pur

A: Invoice-: An invoice is simply a time-stamped marketable paper that itemizes and documents an…

Q: Trade discount is allowed at the time of sale of goods. (A) is recorded in sales book (B) is…

A: Journal entries are made to record the transactions as the first process in the books of accounts…

Q: What do you call to a document issued when you purchase or sold on account (credit basis)? 2. It is…

A: The accounting is a process to identify the business transactions, record the transactions and…

Q: -It is used to who is responsible for paying shipping and when the title of the goods passes from…

A: Terms that determine the responsibility of bearing of shipping cost are shipping terms.

Q: -It is used to who is responsible for paying shipping and when the title of the goods passes from…

A: When a Business transaction is executed, it is subjected to certain terms and conditions that govern…

Q: Requirement a. What are the accounting requirements for a correct sales cutoff? A. A shipment…

A: Revenue shall be recognition according to accounting standards. Following is the condition to…

Q: A retailer pays for purchased merchandise within the discount window. The retailer would recognize…

A: Accounts Payable - Accounts Payable is the creditor for the company. Company owed some amount for…

Q: Decreases in the seller's receivable from a customer's return of merchandise or from granting the…

A: Seller is the person who sells goods and services to customers. Customers are the persons who buys…

Q: Which of the following included in the buyer's cost? A. All the descriptions are tight. B. Insurance…

A: Inventory cost refers to the cost that is related to the business associated with the holding…

Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

True or false 1. The sellers and buyers are required to record trade discounts 2. If the ownership of the merchandise passes to the buyer when the seller delivers the merchandise for shipment, the terms are stated as FOB destination

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

ces For each transaction of Sealy Company, (a) determine whether or not Sealy owns the goods during transit. (b) If Sealy is responsible for transportation costs, record the entry for shipping costs assuming they are paid in cash and the perpetual inventory system is used. Complete this question by entering your answers in the tabs below. Required A Required B Determine whether or not Sealy owns the goods during transit. Transaction 1. Purchased goods FOB shipping point. Transportation costs are $730. 2. Sold goods FOB destination. Transportation costs are $330. 3. Sold goods FOB shipping point. Transportation costs are $480. 4. Purchased goods FOB destination Transportation costs are $190. Sealy has Ownership? Required B >
3 In accounting for consignment sales, sales revenue and the related cost of goods sold should be recognized by the Group of answer choices Consignor when the goods are shipped to the consignee Consignee when cash is received from the customer Consignor when notification is received that the consignee has sold the goods Consignor when the goods are shipped to the third party
Determine the amount to be paid by the buyer for full settlement of each invoice, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Merchandise Transportation Paid by Seller Transportation Terms Returns and Allowances (a) $7,100 $348 FOB Shipping Point, 1/10, net 30 $700 (b) $3,800 $124 FOB Destination, 2/10, net 45 $800 a. $ b. $
When inventory is purchased on credit with terms FOB shipping point, what does the buyer do? Responses The buyer receives a discount if payment is made before the goods leave the seller’s place of business. The seller bears the insurance expense of goods during transit. The buyer reports the liability when the goods reach the buyer’s place of business. The buyer reports the liability when the goods leave the seller’s place of business.
True or False 1. The seller nay prepay the transportation cost even though the terms are FOB shipping point 2. Title to merchandise shipped FOB shipping points passes to the buyer upon delivery of the merchandise to the buyer's place of business
Which of the following is not a characteristic of FOB Destination?A. The seller pays for shipping.B. The seller owns goods in transit.C. The point of transfer is when the goods leave the seller’s place of business.D. The point of transfer is when the goods arrive at the buyer’s place of business
A receiving report is filled out when we receive: An inventory shipment from a vendor. Items that a customer is authorized to return from a previous sale. A payment on a customer's account. a and b only. Answer is not the First option!
When should revenue from the sale of merchandise normally be recognized? A)When the customer takes possession of the merchandise. B)When the customer takes possession of the merchandise, if sold for cash, or when payment is received, if sold on credit. C)Either on the date the customer takes possession of the merchandise or on the date on which the customer pays. D)When the customer pays for the merchandise.
It is used to who is responsible for paying shipping and when the title of the goods passes from seller to buyer: This term will be applicable to a. Discount term b. Credit terms c. Cash term d. Shipping terms
b) Complete the following table to show how FOB terms apply to merchandise inventory purchased by a merchandiser. FOB Term When does the title to the Who pays the goods transfer to the buyer? freight? Shipping Point Destination c) Journalize the following transaction for a merchandiser that uses the perpetual inventory system. Sold goods for cash of $1,200 and on account of $800. Total cost $1,500. Omit explanations.
Under the perpetual inventory system, in addition to making the entry to record a sale, a company would a. Debit Merchandise Inventory and Credit to Cost of Goods Sold. b. Debit to Cost of Goods Sold and credit to Merchandise Inventory c. Deb it to Cost of Goods Sold and credit to purchases d. No entry
A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called a cash discount. Please explain with full explanation a. True b. False