18 Questions
What accounts are affected when recording returned goods from customers at their sales price?
Sales returns and allowances, Cash or Accounts receivable
What is the purpose of the second entry when customers return goods?
Update the Inventory account
What is recorded when customers pay early to take advantage of terms offered?
Sales discount
What is the main purpose of closing entries at the end of a period?
To zero out temporary accounts
Which financial statement provides users with more information for decision-making?
Multi-step income statement
What differentiates the preparation of the balance sheet for merchandising companies from that of service companies?
Addition of the asset account, Inventory
What is the net sales revenue for October 2012?
$35,280
What is the gross profit for October 2012?
$13,680
Why might the physical count of inventory differ from the book balance?
Inventory shrinkage or theft
What account should be closed first in the closing entries process?
Revenues
If the unadjusted balance of the Inventory account was $63,000 and the physical count was $61,900, what is the adjusting entry?
Debit Cost of Goods Sold $1,100; Credit Inventory $1,100
What happens to the Sales Discount in the calculation of Net Sales Revenue?
It is deducted from Gross Sales Revenue
What was the total amount of Sales Revenue reported by Carolina Communications?
$696,000
What is the total amount of Rockwell's Capital?
$208,000
How much was the Accounts Payable balance reported by Carolina Communications?
$17,000
What was the total amount of Inventory mentioned in the financial statements?
$261,000
Which account represents a Sales Discount in the financial statements?
$9,000
What was the total amount of Rent Expense reported by Carolina Communications?
$21,000
Learn about accounting entries for returned goods from customers and sales discounts. Understand how to record sales returns and allowances, update inventory accounts, and record sales discounts in financial statements.
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