In a purchase transaction, when the buyer includes a debit to transportation in and an addition to the accounts payable with the same amount, what could be the freight terms? FOB Destination, freight collect FOB Destination, freight prepaid FOB Shipping Point, freight collect FOB Shipping Point, freight prepaid What will happen if the amount of profit for the current period is less than the amount of the owner's withdrawals? The cash account will increase. The cash account will decrease. O The owner's capital account will increase. O The owner's capital account will decrease. O The liabilities on the balance sheet will increase.

In a purchase transaction, when the buyer includes a debit to transportation in and an addition to the accounts payable with the same amount, what could be the freight terms? FOB Destination, freight collect FOB Destination, freight prepaid FOB Shipping Point, freight collect FOB Shipping Point, freight prepaid What will happen if the amount of profit for the current period is less than the amount of the owner's withdrawals? The cash account will increase. The cash account will decrease. O The owner's capital account will increase. O The owner's capital account will decrease. O The liabilities on the balance sheet will increase.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 1EA: Identify whether each of the following transactions, which are related to revenue recognition, are...

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Similar questions

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.
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.
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.
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 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
Name two situations where cash would be remitted to a retailer from a manufacturer after purchase.
Which of the following accounts are used when recording a purchase? A. cash, merchandise inventory B. accounts payable, merchandise inventory C. A or B D. cash, accounts payable
Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. A. sold goods to customers on credit B. collected cash from customer accounts C. sold goods to customers for cash D. collected cash in advance for goods to be delivered later
Which of the following needs an adjustment to the accounts receivable account of AB Company? a. a freight cost paid by the buyer for goods shipped FOB shipping point b. freight cost prepaid by the seller for good shipped FOB destination c. freight cost prepaid by the buyer for goods shipped FOB shipping point d. freight cost prepaid by the seller for goods shipped FOB shipping point
Cost of goods sold = Opening inventory + Purchases – Purchase returns (if any) – _________. Select one alternative: Cash Freight costs Closing inventory Discount for early payment
The realisation concept determines when goods sent on credit to customers are to be included in the sales figure for the purpose of computing the profit or loss for theaccounting period. Which of the following tends to be used in practice to determine when to include a transaction in the sales figure for the period. When the goods havebeen:a. dispatched b. invoiced c. delivered d. paid forGive reasons for your answer.
When merchandise was shipped by the consignor to the consignee and freight on shipment was paid by the latter, then: Sale is properly recognized by the consignor. The cost per unit of the merchandise will eventually increase. Freight in is properly recognized by the consignee. The consignee, upon receipt of the goods, is already entitled for commissions income. The risk and reward over the merchandise is transferred to the recipient of goods.