1. A purchaser dissatisfied with his purchases returns the goods to the seller for a cash refund. This is a case of: (a) Purchase Allowance (b) Purchase Return (c) Sales Return (d) Sales Allowance 2. Under the perpetual Inventory system, the freight costs incurred by the seller are apart of their: (a) Cost of goods sold (b) Operating expenses (c) Contra-revenue account (d) Sales revenue 3. An item of merchandise was sold was sold for $800 cash by a business using the perpetual inventory system. The product sold cost the business $600. After the sale entry has been recorded, a second entry will- (a) Debit merchandise Inventory $800 and credit cost Goods Sold $800 (b) Debit cost of goods sold $600 and credit Merchandise Inventory $600 (c) Debit cash $800 and credit sales for $800 (d) Debit sales $600 and credit Merchandise Inventory for $600

1. A purchaser dissatisfied with his purchases returns the goods to the seller for a cash refund. This is a case of: (a) Purchase Allowance (b) Purchase Return (c) Sales Return (d) Sales Allowance 2. Under the perpetual Inventory system, the freight costs incurred by the seller are apart of their: (a) Cost of goods sold (b) Operating expenses (c) Contra-revenue account (d) Sales revenue 3. An item of merchandise was sold was sold for $800 cash by a business using the perpetual inventory system. The product sold cost the business $600. After the sale entry has been recorded, a second entry will- (a) Debit merchandise Inventory $800 and credit cost Goods Sold $800 (b) Debit cost of goods sold $600 and credit Merchandise Inventory $600 (c) Debit cash $800 and credit sales for $800 (d) Debit sales $600 and credit Merchandise Inventory for $600

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter5: Accounting For Retail Businesses

Section: Chapter Questions

Problem 40E: Identify items missing in determining cost of goods sold For (a) through (e), identify the items...

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Similar questions

Which of the following is true about the Sales Returns and Allowances account? a. It is used to record the sale of merchandise. b. It is used to record the reduction of inventory. c. It is a contra account, deducted from sales. d. It is used to record discounts for prompt payment. e. None of the above.
Which of the following is an example of a contra revenue account? A. sales B. merchandise inventory C. sales discounts D. accounts payable
Under the retail inventory method, freight-in would be included in the calculation of the goods available for sale for which of the following?
For each of the following accounts, identify whether the normal balance is a debit or a credit. Also specify whether the account is a contra account. a. Sales Returns and Allowances b. Merchandise Inventory c. Sales d. d Freight In e. Purchases Returns and Allowances f. Sales Tax Payable g. Purchases
Which of the following accounts are used when recording a purchase using a periodic inventory system? A. cash, purchases B. accounts payable, sales C. accounts payable, accounts receivable D. cash, merchandise inventory
The difference between merchandise available for sale and the end-of-period merchandise inventory is called (a) gross profit. (b) net purchases. (c) net sales. (d) cost of goods sold.
What is the difference in reporting requirements for customer-returned merchandise in sellable condition under a perpetual inventory system versus a periodic inventory system?
Which two accounts are used to recognize shipping charges for a buyer, assuming the buyer purchases with cash and the terms are FOB Shipping Point? A. delivery expense, cash B. merchandise inventory, cash C. merchandise inventory, accounts payable D. The buyer does not record anything for shipping since it is FOB Shipping Point.
Consider each of the following independent situations. Should a company report the goods in its inventory? (a) Goods purchased by the company with shipping terms FOB shipping point that are in transit at the end of the year (b) Goods received by the company on consignment (c) An estimate of the amount of goods sold by the company that it expects the buyer to return (d) Goods required to be purchased by the company under an unconditional purchase obligation
In the income statement, Freight-In is (a) added to purchases. (b) subtracted from purchases. (c) added to sales. (d) subtracted from cost of goods.
Identify items missing in determining cost of goods sold For (a) through (e), identify the items designated by X and Y. A. Purchases (X + Y) = Net purchases B. Net purchases + X = Cost of inventory purchased C. Inventory (beginning) + Cost of inventory purchased = X D. Inventory available for sale X = Cost of inventory before estimated returns E. Cost of goods sold before estimated returns X = Cost of goods sold
Using the perpetual inventory system, what account is debited when a business finds that its physical count of inventory is greater than the recorded amount?