If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated asDa. FOB destinationOb. FOB shipping pointOc. FOB n/30Od. FOB buyer

Cost of goods sold: It refers to the overall cost incurred by a company for the production of the…

Answered: If the buyer is to pay the freight…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 7DQ

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Merchandise Accounting Merchandise Inventory Raw materials Work in process Finished goods Gross profit Net sales Sales revenue Cost of goods available for sale Cost of goods sold Perpetual system Periodic system Transportation-In Purchases FOB destination point FOB shipping point Gross profit ratio An adjunct account used to record freight costs paid by the buyer. A system in which the Inventory account is increased at the time of each purchase and decreased at the time of each sale. Terms that require the seller to pay for the cost of shipping the merchandise to the buyer. Terms that require the buyer to pay for the shipping costs. A system in which the Inventory account is updated only at the end of the period. Beginning inventory plus cost of goods purchased. An account used in a periodic inventory system to record acquisitions of merchandise. Sales revenue less sales returns and allowances and sales discounts. Cost of goods available for sale minus ending inventory. Gross profit divided by net sales. Net sales less cost of goods sold. The cost of unfinished products in a manufacturing company. The account wholesalers and retailers use to report inventory held for sale. The inventory of a manufacturer before the addition of any direct labor or manufacturing overhead. A manufacturers inventory that is complete and ready for sale. A representation of the inflow of assets from the sale of a product.
FOB shipping point means that transportation charges are paid by the seller.
For goods in transit at the end of a period, describe how a company determines if the goods should be included in inventory.
Which of the following is not a characteristic of FOB Shipping Point? A. The buyer pays for shipping. B. The buyer owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
What is the difference in reporting requirements for customer-returned merchandise in sellable condition under a perpetual inventory system versus a periodic inventory system?
Inventory Costing: LIFO Refer to the information for Filimonov Inc. and assume that the company uses a perpetual inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the LIFO inventory costing method.
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 sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
When inventory items are highly specialized, the best inventory costing method is ________. A. specific identification B. first-in, first-out C. last-in, first-out D. weighted average
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 sold
Which of the following is an example of a contra revenue account? A. sales B. merchandise inventory C. sales discounts D. accounts payable

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If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as Da. FOB destination Ob. FOB shipping point Oc. FOB n/30 Od. FOB buyer