The Corner Store is a small-sized, general store which stocks a minimal level of basic supplies and offers gasoline to a rural community. Which one of the following types of credit is probably best-suited for financing this store's inventory? A. Trust receipt financing B. Receivables factoring C. Field warehousing D. Blanket inventory lien E. Receivables assignment

The Corner Store is a small-sized, general store which stocks a minimal level of basic supplies and offers gasoline to a rural community. Which one of the following types of credit is probably best-suited for financing this store's inventory? A. Trust receipt financing B. Receivables factoring C. Field warehousing D. Blanket inventory lien E. Receivables assignment

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 5TP: You own a clothing store and use a periodic inventory system. Research like companies in the...

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A store engaged in reselling jewelries would least likely employ which inventory system? a. EOQ b. Two-bin method c. Just in time d. ABC system 7. A grocery store owner selling low value items would be the most interested in this inventory management system: a. EOQ b. Two-bin method c. Just in time d. ABC system 8. Components of a firm’s cash conversion cycle include: a. Average collection period, average age of inventory b. Average payment period, average collection period c. Average age of inventory and average payment period d. Average of age inventory, average collection period and average payment period 9. Which of the following statements is correct with regard to the use of a lockbox system? a. It reduces mail float and clearing float but not payment float. b. It reduces all components of a float. c. It reduces payment and mail float but not clearing float. d. It increases all…
Sheraton Ltd operates a chain of supermarkets across the Islands. Each supermarket has a bakery and a restaurant. However, due to the COVID-19 protocol, only take-out service is being offered. Most of the customers are within walking distance to the supermarket, however, due to the excellent service and reasonable prices. a few customers travel from communities that are out of the area to shop. Management has reviewed the inventory reports and observed there are consistent discrepancies with the cash counts and inventory. They suspect that some employees have been stealing goods from the supermarket. They are keen to prevent this from reoccurring and considering establishing an Internal Audit Department to undertake a fraud investigation. The Directors would like the Internal Audit Department to have as broad a role as possible, as this will make the decision to establish an Internal Audit Department more cost effective, rather than outsourcing same. REQUIRED: Prepare a report to the…
You have decided to open up a small convenience store in your hometown. As part of the initial set-up process, you need to determine whether to use a perpetual inventory system or a periodic inventory system. Write an evaluation paper comparing the perpetual and periodic inventory systems. Describe the benefits and challenges of each system as it relates to your industry and to your business size. Compare at least one example transaction using the perpetual and periodic inventory systems (a purchase transaction, for example). Research and describe the impact each system has on your financial statements. Decide which system would be the best fit for your business, and support your decision with research.
Budd, the purchasing agent of Lake Hardware Wholesalers, has a relative who owns a retail hardware store. Budd arranged for hardware to be delivered by manufacturers to the retail store on a cash-on-delivery (C.O.D.) basis, thereby enabling his relative to buy at Lake’s wholesaleprices. Budd was probably able to accomplish this because of Lake’s poor internal control overa. Purchase requisitions.b. Cash receipts.c. Perpetual inventory records.d. Purchase orders.
The business rules that constitute the purchases system for the Safe Buy Grocery Stores chain are similar at all the store locations. The purchase manager at each location is responsible for selecting his or her local suppliers. If the manager needs a product, he or she chooses a supplier. Each store follows the steps described here.1. The purchasing function begins with sales representatives from suppliers periodically observing the shelves and displays at each location and recognizing the need to restock inventory. Inventory declines by direct sales to the customers or by spoilage of perishable goods. In addition, the supplier’s sales representatives review obsolescence reports that the purchase manager prepares. These reports identify slow-moving and dated products that are deemed unsalable at a particular location. These products are returned to the supplier and replaced with more successful products. The sales representatives prepare a hard-copy purchase requisition and meet with…
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Everyday Supplies Pty Ltd is a single-store retailer that sells a variety of tools, garden supplies,timber, small appliances, and electrical fixtures to the public, although about half of EverydaySupplies’ sales are to construction contractors on account.Retail customers pay for merchandise by cash or credit card at cash registers when merchandise ispurchased. A contractor may purchase merchandise on account, if approved by the credit managerbased only on the manager’s familiarity with the contractor’s reputation. After credit is approved,the sales associate files a prenumbered charge form with the accounts receivable supervisor to setup the receivable.The accounts receivable supervisor independently verifies the pricing and other details on thecharge form by reference to a management - authorised price list, corrects any errors, preparesthe invoice, and supervises a part-time employee who mails the invoice to the contractor. Theaccounts receivable supervisor electronically posts the…
Everyday Supplies Pty Ltd is a single-store retailer that sells a variety of tools, garden supplies,timber, small appliances, and electrical fixtures to the public, although about half of EverydaySupplies’ sales are to construction contractors on account.Retail customers pay for merchandise by cash or credit card at cash registers when merchandise ispurchased. A contractor may purchase merchandise on account, if approved by the credit managerbased only on the manager’s familiarity with the contractor’s reputation. After credit is approved,the sales associate files a prenumbered charge form with the accounts receivable supervisor to setup the receivable.The accounts receivable supervisor independently verifies the pricing and other details on thecharge form by reference to a management - authorised price list, corrects any errors, preparesthe invoice, and supervises a part-time employee who mails the invoice to the contractor. Theaccounts receivable supervisor electronically posts the…