Which of the following needs an adjustment to the accounts receivable account of ABC Company? a. Goods in transit as of the reporting date shipped to a customer FOB destination not recorded as sales and correctly included as inventory b. Goods in transit as of the reporting date, shipped to a customer FOB shipping point, correctly recorded as sales but was included as inventory c. Goods in transit as of the reporting date, shipped to a customer FOB shipping point, correctly recorded as sales, and was excluded from inventory d. Goods in transit as of the reporting date, shipped to a customer FOB destination recorded as sales however correctly included as inventory

Q: Max Company has chosen to use an allowance account. When the cost of goods sold method is used with…

A: Full form of NRV is Net Realizable Value.

Q: The adjusting entry to set up the ending inventory will have: (A) a credit to Sales B a debit to…

A: Ending inventory is the worth of products still available for sale and held by a corporation at the…

Q: Which one of the following transactions is recorded with the same entry in a perpetual and a…

A: With the perpetual system all the sales are directly credited to inventory and all the purchases are…

Q: Which of the following is the correct journal entry for a return of goods that were purchased on…

A: As periodic inventory system purchases and sales are used instead of merchandise inventory.

Q: Under the perpetual inventory​ system, the journal entry to record the freight paid by the seller on…

A: Under perpetual inventory system, inventory account is used instead of purchases account. For every…

Q: For each of the following, indicate whether it would be reported on the balance sheet (B/S),reported…

A: A balance sheet is a financial statement which reports the closing balances of  Assets, Liabilities…

Q: What is the effect on net income if a company failed ro record a purchase in transit (FOB shipping…

A: Purchase in transit (FOB shipping point) means that where buyer become the owner of the goods at the…

Q: Indicate whether the following statements are true or false. 1. A merchandising company reports…

A: 1) This statement is True. As Service Based Companies do not sell the products so there Income…

Q: Which of the following statements regarding the cost of transportation-in for the purchase of…

A: Cost of goods sold = Beginning inventory + Purchase of merchandise  + Transportation in - Ending…

Q: Which function or department below records the decrease in inventory due to a sale? a. warehouse b.…

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

Q: Which of the following procedure is designed to prevent the company from ordering unnecessary items?…

A: D) Approval of purchase requisitions is the procedure designed to prevent the company from ordering…

Q: Woods Co. received merchandise on consignment. As of January 31, Jordan included the goods in…

A: Introduction: When goods are consigned, the consignor sends them to the agent (the consignee), who…

Q: e entry to record the return of $250 of inventory to a supplier under the perpetual inventory system…

A: Solution: The entry to record the return of $250 of inventory to a supplier under the perpetual…

Q: Which of the following transactions would not result in an adjustment to the inventory account under…

A: Sale of merchandise on cash and credit and merchandise return all includes inventory account but…

Q: At what amount will the inventory and cost of goods sold amounts be reported on the financial…

A: As per the accounting standards, the closing inventory must be reported at lower of cost or net…

Q: Which of the ff needs an adjustment to the A/R account of ABS company? a. goods in transit of the…

A: Under the FOB destination point sale, the seller can record its sales only after the buyer takes the…

Q: Cost of goods sold is debited each time a sale is made under which of the following inventory…

A: The carrying value of the goods that are sold during a given period of time are termed as cost of…

Q: How is merchandise inventory classified on the balance sheet and what is its normal balance of…

A: Merchandise inventory is a current Asset as it is expected to be sold within 12 months from the…

Q: Listed below are several terms and phrases associated with inventory measurement. Pair each item…

A: FIFO : First-in-first-out LIFO : Last-in-first-out Gross method : The sales / purchases are recorded…

Q: Under the perpetual inventory system, in addition to making the entry to record a sale, a company…

A: Under perpetual inventory system, the decrease in inventory is also recorded every time of sale.

Q: A company using a perpetual inventory system that returns goods previously purchased on credit would…

A: What is perpetual inventory system? It is a system which record the changes in inventory(purchased…

Q: At the end of the accounting period, the correct entry in the general journal to adjust for…

A: Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: Consider each of the following independent situations. Should a company report the goods in its…

A: If the seller expects a sales return, then it should debit sales return and credit refund liability…

Q: When preparing a worksheet for a merchandising company using periodic inventory system, which…

A: 1. The income statement contains all temporary accounts and the balance sheet contains all the…

Q: Which of the following accounts will not be found in the cost of merchandise sold section of the…

A: Income statement: The income statement is a financial statement that shows the net income earned or…

Q: What account is debited when recording the adjusting entry to write down merchandise inventory under…

A: Lower-of-cost-or-market: The lower-of-cost-or-market (LCM) is a method which requires the reporting…

Q: n perpetual method, _______________ will be credited if an item bought will be returned.    Cost of…

A: In perpetual method, Merchandise Inventory will be credited if an item bought will be returned. Cost…

Q: Record general journal entries to correct the errors described below. Assume that the incorrect…

A: Journal entries are the primary recording makes in the books of account. All the transactions are…

Q: Which of the following is incorrect about the perpetual inventory method? a. purchases are…

A: Perpetual inventory method : Perpetual inventory method records real time transactions of inventory…

Q: ic inventory system wants to remove beginning estimated returns inventory, which of the following…

A: The right answer is option a.Estimated Returns Inventory

Q: Which of the following methods is appropriate for a business whose inventory consists of a…

A: Note: Since we are entitled to answer only one question, we’ll answer the first question. Please…

Q: Which term is applied to the excess of revenue from sales over the cost of merchandise sold? a.net…

A: Income statement: It refers to a financial statement that presents all the income earned by the…

Q: When merchandise sold is assumed to be in the order in which the purchases were made, the company is…

A: “Since you have asked multiple questions, we will solve the first question for you.  If you want a…

Q: What is the correct entry to write off the inventory under perpetual method? Dr. Cost of Goods sold…

A: The Perpetual Inventory System is a highly preferred system as it can produce accurate results…

Q: Which of the following statement is FALSE for Merchandise inventory of the Business? a. It is a…

A: Merchandise inventory is classified as a current asset on the balance sheet. Assets normally have a…

Q: From the general​ journal, record to the accounts receivable subsidiary ledger and post to the…

A: Step 1 Journal and ledger posting is the part of book keeping and in the given case we post the…

Q: Which of the following should be included in inventory on the balance sheet? Goods out on approval…

A: Goods purchased that are in transit F.O.B destination and raw materials will be recorded and…

Q: Under the perpetual inventory system, all purchases of merchandise are debited to the account…

A: Perpetual inventory system: It is a method of inventory management that records real time…

Q: Which of the following accounts would not appear on a worksheet for a merchandising entity that uses…

A: Periodic inventory system is a system of recording inventory in a way the closing stock is found out…

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Definition: Perpetual inventory: Under the perpetual inventory system, each transaction for the…

Q: 3.Which of the following transactions would not result in an adjustment to the inventory account…

A: Perpetual inventory system is the one in which the record relating to the inventory is to be…

Q: Shipments of inventory to the branch may be billed at other than cost. When billing prices are above…

A: Introduction:- Branch Accounting is the different type of bookkeeping or accounting.…

Q: If the balance in the inventory account is greater than the physical count, which of the following…

A: When inventory is found to be greater than physical count , we need to increase inventory. For…

Q: ears in both the debit and the credit columns appears in the credit column only is correct as stated…

A: Merchandise inventory is the value of items in stock, whether they are finished goods or raw…

Q: The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a periodic…

A: Perpetual and periodic inventory system: In merchandise business, there are two types of inventory…

Q: Match each definition with the term that best describes it. An income measure that includes gains…

A: Income statement: The income statement determines the net income of the business by subtracting the…

Q: Petco Inc. uses the periodic inventory system. Assess the effect on net income of including goods in…

A: Not including the fob shipping purchases in the ending inventory will understate the ending…

Q: Which of the following statements is true for a company that uses a periodic inventory system?…

A: Only inventory account is used for all the inventory transactions in the perpetual inventory system.…

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is