Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 6, Problem 11SE
To determine
Indicate each of the following decisions as most directly related to (a)
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Which of the following account will be least likely involved in the purchasing sub-process of the purchasing and disbursement cycle?
Group of answer choices
a.Inventory
b.Prepaid expenses
c.Accounts payable
d.Cash in bank
which of the following account will be least likely involved in the purhasing sub-process of the purchasing and disbursement cycle?
a. inventory
b. prepaid expenses
c. accounts payable
d. cash in bank
Assume that a perpetual inventory system using the NET METHOD is in use. Which of the following statements regarding the journal entries prepared is correct?
A) When a customer returns inventory, the seller debits Customer Refunds Payable.
B) Shipping costs associated with sales with terms FOB, destination should be included in Cost of Merchandise Inventory.
C) When a company receives payment from a customer for a sale, Cash is debited and Accounts Payable is credited.
D) When a company sells merchandise with terms 2/10, n 30, the company will credit Merchandise Inventory for the amount of the discount of 2 percent of sales.
Why is the answer A and not D?
Chapter 6 Solutions
Principles of Accounting
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Assume a large shipment of uninsured merchandise...Ch. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Indicate whether each of the statements that...Ch. 6 - Prob. 2SECh. 6 - Prob. 3SE
Ch. 6 - Prob. 4SECh. 6 - Prob. 5SECh. 6 - Prob. 6SECh. 6 - Prob. 7SECh. 6 - Prob. 8SECh. 6 - Record the following transactions using T...Ch. 6 - Prob. 10SECh. 6 - Prob. 11SECh. 6 - Sutton Hills Companys management made the...Ch. 6 - Prob. 2EACh. 6 - A company has the following data: net sales,...Ch. 6 - Prob. 4EACh. 6 - Prob. 5EACh. 6 - Linear Company engaged in the following...Ch. 6 - Prob. 7EACh. 6 - Prob. 8EACh. 6 - Prob. 9EACh. 6 - Prob. 10EACh. 6 - Prob. 11EACh. 6 - Prob. 12EACh. 6 - Prob. 13EACh. 6 - Prob. 14EACh. 6 - Prob. 15EACh. 6 - Matuska Tools Corporations income statements...Ch. 6 - Selected accounts from Murrays Furniture Stores...Ch. 6 - Prob. 3PCh. 6 - Selected accounts from Dences Gourmet Shops...Ch. 6 - Prob. 5PCh. 6 - Teague Company engaged in the following...Ch. 6 - Prob. 7APCh. 6 - Prob. 8APCh. 6 - Prob. 9APCh. 6 - Prob. 10APCh. 6 - Prob. 11APCh. 6 - Prob. 12APCh. 6 - Prob. 1CCh. 6 - Prob. 2CCh. 6 - Prob. 3CCh. 6 - Prob. 4CCh. 6 - Prob. 5CCh. 6 - Prob. 6C
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- Which of the following accounts are used when recording the sales entry of a sale on credit? A. merchandise inventory, cash B. accounts receivable, merchandise inventory C. accounts receivable, sales D. sales, cost of goods soldarrow_forwardWhich of the following account will be least likely involved in the purchasing sub-process of the purchasing and disbursement cycle? a. Inventory b. Prepaid expenses c. Accounts payable d. Cash in bankarrow_forwardWhich of the following journal entry is correct for the transactions of goods returned by a customer? Sales returns (debit) Trade payables(credit) Sales returns (debit) Trade receivables(credit) Purchase returns (debit) Trade payables(credit) Purchase returns (debit) Trade receivables(creditarrow_forward
- Which of the following is NOT a financial transaction? a. purchase of products b. cash receipts c. update valid vendor file d. sale of inventoryarrow_forwardInstructions: Give its Journal Entry The company's Chart of accounts includes the following: Cash, Accounts Receivable, Merchandise Inventory, Supplies, Accounts payable; Wakang, capital; Sales; Sales Returns and Allowances; Sales Discounts; Purchases; Purchase returns and allowances; Purchase Discounts, Freight-In.arrow_forwardBusiness documents used to keep track of sales and purchases are called _____. F.O.B. shipping point terms of sale invoices F.O.B. destinationarrow_forward
- Terminology Match each phrase with its definition. A. Sales discount B. Credit period C. Discount period D. FOB destination E. FOB shipping point F. Gross profit G. Merchandise inventory H. Purchases discount 1. 2. 3. 4. 5. 6. 7. 8. Goods a company owns and expects to see to its customers. Time period that can pass before a customer's full payment is due. Seller's description of a cash discount granted to buyers in return for early payment. Ownership of goods is transferred when the seller delivers goods to the carrier. Purchaser's description of a cash discount received from a supplier of goods. Difference between net sales and the cost of goods sold. Time period in which a cash discount is available. Ownership of goods is transferred when delivered to the buyer's place of business. 1arrow_forwardBriefly describe the ratios that can be used to evaluate a company’s ability to sell merchandise inventory and collect receivables.arrow_forwardThe primary objective of inventory accounting is to a. Determine the peso amount at which inventory and cost of sales should be reported. b. Match appropriate costs against revenues in order that there may be a proper determination of net income. c. Allocated the cost of goods available for sale between inventory and cost of sales. d. Value inventory at the lower of cost or market.arrow_forward
- Where do you find inventory, sales, and cost of sales accounts on the financial statements?arrow_forwardWhich term is applied to the excess of revenue from sales over the cost of merchandise sold? a.net income b.gross sales c.income from operations d.gross profit the inventory system employing accounting records that continuously disclose the amount of inventory is called a.retail b.periodic c.physical d.perpetualarrow_forwardIf a company uses a periodic inventory system, which of the following entry or entries are required to record the sale of merchandise on account? a.debit Cost of Goods Sold; credit Inventory b.debit Cost of Goods Sold; credit Purchases c.debit Cash, credit Sales Revenue d.debit Accounts Receivable, credit Sales Revenuearrow_forward
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