Is a customer’s right to return merchandise a performance obligation of the seller? How should sellers account for a right of return?

Q: Which one of the following types of discounts is given to the buyer if the buyer makes a bulk…

A: The answer for the question on discounts is given hereunder :

Q: Define the term merchandise returns.

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: The realisation concept determines when goods sent on credit to customers are to be included in the…

A: Sales: It is an activity of selling goods and services in exchange for money.

Q: Which account balance is NOT used to compute the cost of goods sold? a.Merchandise Inventory…

A: Formula: Cost of goods sold = Beginning Merchandise inventory + Net Purchases - Ending Merchandise…

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: How should a non vat seller treat input vat paid on the purchases from vat supplier of inventories…

A: The major purpose of adopting VAT is to reduce the effects of multiple taxes and the cascading…

Q: The credit period during which the buyer of merchandise is allowed to pay usually begins with what…

A: Credit period generally begins with the date of sales as recorded on the invoice.If the payment is…

Q: hat account does a merchandiser use that a service company does not use?

A: Merchandiser deals in purchasing and selling products to customer whereas  a service company deals…

Q: Seller is notified of goods returned by the buyer when he receives a

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic…

Q: What is the difference between a sales discount and a purchases discount?

A: The term sales discount is used by the seller, and the term purchase discount is used by the…

Q: Which one of the following statements is false? a. FOB shipping point means the buyer has legal…

A: FOB shipping point means title of the goods is transferred when goods are placed at the shipping…

Q: When does a company typically recognize revenue for a bill-and-hold sale?

A: Bill and hold agreements represent a sales arrangement in which the buyer pays for the item or items…

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: True or False Merchandise inventory consists of products that a company acquires to resell to…

A: Merchandise inventory refers to inventory held by the company.

Q: when a company holds the merchandise for another company to sell, that merchandise is said to be…

A: Any good which is produced by the business to be kept to sale once it is a finished good. Such sale…

Q: An item must possess two characteristics to be classified as inven tory by a merchandiser. What are…

A: The item must satisfy two characteristics to be classified as an inventory by a merchandiser.  1.…

Q: Which one of the following statements best describes the purpose of a purchase order? A It is issued…

A: Purchase Order: A company before purchasing goods invite qoutation of goods from suppliers. When…

Q: Consignments refer to that specialized marketing method whereby the Consignee a. holds title to the…

A: Solution: In the consignments model, consignor will remain owner of goods and consignee takes…

Q: Which income statement account(s) would be affected by a policy choice at the same time as the…

A: Inventory is directly related to the cost of goods sold. To change the policy of valuation of…

Q: If the sale includes the seller paying the freight costs and assuming the responsibility for…

A: FOB shipping point sale: When the goods are shipped to the buyer, the title is transferred to the…

Q: Discuss the treatment of freight-in, purchase returns, purchase discounts, normal spoilage, sales…

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: What is a purchase return? How does a purchase allowance differ from a purchase return?

A: Purchase return: Purchase return refers to return of merchandise or goods purchased by customers to…

Q: When should a seller view a payment to its customer as a refund of part of the price paid by the…

A: Revenue recognition principle:   The revenue recognition principle refers to the revenue that…

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: If a customer agrees to retain merchandise that is defective because the seller is willing to reduce…

A: A discount is a reduction in list price of a product as a normal business practice or due to early…

Q: Which of the following feature/s related to FOB shipping point under shipping terms, except?

A: Solution- FOB shipping point – Notes responsibility of goods and title transfer from seller to buyer…

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: 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: What is the effect on the cost of goods sold, gross profit, and net income if ending merchandise…

A: Ending inventory is the value of inventory available on hand at the end of the accounting period.

Q: Let's assume the merchandiser (buyer) pays after the discount period expires, how will the vendor…

A: The payment terms of Sports Emporium Sales is 2/10, n/30. It means if payment is done within 10 days…

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: Ways on how the law of sales and negotiable instrument can be applied in daily lives.

A: The financial position of the company can be arrived from the income statement prepared by the…

Q: . In addition to the purchase price, what additional expenditures does the companyinclude in the…

A:

Q: Define and describe the differences between a sales return and a sales allowance

A: Sales revenue: It is the revenue earned by a business on selling the goods or providing services to…

Q: Which of the following is not a characteristic of FOB Destination?A. The seller pays for shipping.B.…

A: FOB (Freight on Board) Destination seems to be a shipping terminology that signifies the seller…

Q: What is the difference in the operating cycle of a service provider and a merchandiser?

A: Operating cycle is defined as the amount of time the company requires to use its cash in order to…

Q: What is the difference between gross selling price and invoice price?

A: Invoices are the bill which display the total value of the product purchased. Be it gross selling…

Q: What is the most common constraint faced by merchandisers?

A: Most common constraints faced by merchandisers are: Limited Display Space: Small stores find it…

Q: If the buyer is to pay the transportation costs of delivering the merchandise, delivery terms are…

A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…

Q: What happens when a client (buyer) returns credit-purchased goods?

A: The Answer: