Bundle: College Accounting, Chapters 1-9, Loose-Leaf Version, 22nd + Study Guide and Working Papers + CengageNOWv2™, 1 term Printed Access Card
22nd Edition
ISBN: 9781337147842
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Textbook Question
Chapter 11A, Problem 1RQ
At what amount are purchases recorded under the net-price method?
Expert Solution & Answer
To determine
Indicate the amount at which the purchases are recorded under net-price method.
Explanation of Solution
Purchases: The amount of cost of merchandise bought during a certain period is referred to as cost of purchases.
Net-price method: The method of recording the inventory purchases at net of purchase discounts is referred to as net-price method. Under net-price method, the purchase discounts would be deducted from the gross purchases amount, and the net purchases amount is recorded.
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Chapter 11A Solutions
Bundle: College Accounting, Chapters 1-9, Loose-Leaf Version, 22nd + Study Guide and Working Papers + CengageNOWv2™, 1 term Printed Access Card
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Explain the calculation of net sales and net purchases.arrow_forwardWhich of the following is not included when computing Net Purchases? A. purchase discounts B. beginning inventory C. purchase returns D. purchase allowancesarrow_forwardUnder the retail inventory method, freight-in would be included in the calculation of the goods available for sale for which of the following?arrow_forward
- Under the perpetual inventory system, how does the seller record sales made on account?arrow_forwardWhich 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 inventoryarrow_forwardThe difference between merchandise available for sale and the end-of-period merchandise inventory is called (a) gross profit. (b) net purchases. (c) net sales. (d) cost of goods sold.arrow_forward
- 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 payablearrow_forwardWhat is the normal balance for each of the following accounts: (a) Purchases? (b) Sales Discounts? (c) Purchases Returns and Allowances? (d) Sales? (e) Purchases Discounts? (f) Sales Returns and Allowances?arrow_forward
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