Answered: When a customer (buyer) returns…

Business

Accounting

When a customer (buyer) returns merchandise purchased on credit,what is to be done?

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: The business needs to record the trade discount in the book of account”. Question Do you agree…

A: Discount means the amount which is not required to be paid or received. Discount is deducted to find…

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 a product is sold on credit, which account should be debited for the seller? A.cash…

A: Sale of a product means to sell the goods in stock to the customer. It can be sold either on cash or…

Q: If merchandise purchased on account is returned, the buyer may inform the seller of the details by…

A: Given, Goods are purchased by-merchandise is returned.

Q: A form used to request the responsible person or department to purchase merchandise or other…

A: Person responsible to make purchase would require the details to the purchases required to be made.

Q: True or False: In the credit and operating cycle, the collection stage or cycle begins with the…

A: STEP 1 An operation ratio reflecting the approximate time needed to convert a company's goods into…

Q: In the revenue cycle (for sales on credit), a customer places an order for a certain product. Which…

A: Every time an order is received by an organisation, there is whole set of process that needs to be…

Q: What effects on a retail store's accounting equation occur when merchandise returned by customers is…

A: Introduction:- The following Accounting Equation used for preparation of balance sheet as follows…

Q: Sales Returns and Sales Allowances. What are Sales Discounts? What are their respective normal…

Q: What is a merchandiser, and what is the name of the merchandise that it sells?

A: Merchandiser: A merchandiser is a business that sells goods, or merchandise, to its customers.

Q: Distinguish between cash discounts and trade discounts for purchases. Is the amount of a trade…

A: Discounts are given to attract customers and increase sales revenue. Discounts can be given as cash…

Q: How to Compensate a Buyer for Returned Goods.

A: When a customer returns items to a shop after the parties cancel the initial sales agreement, the…

Q: Give an example of consumer credit and explain the process how it is processed from application to…

A: The customer is allowed to ask for credit in case of no availability of funds. The suppliers provide…

Q: The functions of and documents generated by which of the below departments determine when a…

A: Lets understand the basics. In organization, there are various department which are inter connected…

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: mounts received from the sale of gift cards should be recognized by the seller at the time of sale.…

A: False. This is because Amounts received from the sale of gift cards should not be recognize at the…

Q: Which account does a merchandiser use that a service company does not use? a. Cost of Goods Sold b.…

Q: Which two accounts are used to recognize shipping charges for a buyer, assuming the buyerpurchases…

A: The term "free on board" (FOB) relates to whether the vendor or customer is liable for damaged or…

Q: How would you find the invoice amount of merchandise that was returned in

A: When the merchandise is returned, The invoice amount of return will be credited to the customer's…

Q: Why should one not use a rent-to-own for mer

A: Rent - to- own: Rent-to-own (RTO) stores sell things like articles of furniture and appliances to…

Q: What is the role of a sales invoice in the revenue recognition process?

A: The revenue recognition process is a systematic and structured set of regulations, instructions, and…

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: 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: 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: The functions of and documents generated by which of the below departments determine when a…

A: The documents which complete sale criteria will only make able to record sale transaction. Sale can…

Q: What is Target’s policy with respect to accounting for merchandise returns?

A: Financial Statements: Financial statements are a group or reports that present the financial…

Q: Please tell us about Sales Discounts. Why are they necessary? Does this account appear on the…

A: Discount is the amount of reduction in the value of sale or purchase. In other words, discount in…

Q: One such issue is the Sale with Right of Return. Discuss how do you recognize revenue when the…

A: Revenue Recognition: Revenue recognition is a bookkeeping rule that states that income should be…

Q: Is purchases is the account to be debited upon purchase of merchandise under the perpetual inventory…

A: Perpetual Inventory System It is the most important part of the business to enter the transactions…

Q: Using a perpetual system, the entry to record the sale of merchandise on account includes a a.…

A: Step 1: The sale of merchandise on account simply means that the goods have been sold on credit.…

Q: What account balance is not used to computer the cost of good sold? a. Sales b. Purchased c.…

A: Calculate the cost of goods sold as follows: Cost of goods sold = Opening inventory + Purchases -…

Q: When should companies that sell gift cards to customers report revenue?

A: The Answer

Q: Describe the accounting treatment for merchandise returns.

A: Purchase returns: Purchase returns are the goods returned by the buyer out of the goods purchased.…

Q: the discount that is being acquired

A: First option is wrong because the cash discount is the discount given by the seller to the buyer for…

Q: Why do businesses often offer "Sales Discounts" to their customers?

A: Sales Discounts - Sales Discounts are the discounts given by the company to the customers. This…

Q: Is purchases is the account to be debited upon purchase of merchandise under the perpetual inventory…

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

Q: Sellers use two methods in practice that simplify the process of recording sales discount. What are…

A: Sales: Sales is an activity of selling the merchandise inventory of a business.

Q: When does a company recognize revenue for a sale of a gift card?

A: Gift card: Prepayment which is made by the customer for the future purchase is known as a gift card.…

Question

When a customer (buyer) returns merchandise purchased on credit,what is to be done?

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

Trending now

This is a popular solution!

Step by step

Solved in 2 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

How do you determine the invoice of merchandise returned?
What accounts are used to recognize a retailer’s purchase from a manufacturer on credit?A. accounts receivable, merchandise inventoryB. accounts payable, merchandise inventoryC. accounts payable, cashD. sales, accounts receivable
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
In which of the following scenario will the supplier be issuing a credit memo? Granting of allowance to buyer for defective merchandise All of the above Granting of volume discount Granting Trade discount to buyer
If a customer purchases merchandise on credit and returns the defective merchandise beforepayment, what accounts would recognize this transaction?A. sales discount, cashB. sales returns and allowances, cashC. accounts receivable, sales discountD. accounts receivable, sales returns and allowances
When goods are sold on a bill-and-hold basis, what conditions must be met to recognize revenue upon receipt of the order?
Is a customer’s right to return merchandise a performance obligation of the seller? How should sellers account for a right of return?