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Questions and Answers
What is the purpose of the first adjusting entry?
What is the purpose of the first adjusting entry?
- To decrease the Customer Refunds Payable
- To increase the Cost of Merchandise Sold
- To record the sale of merchandise in 2021
- To recognize the estimated refunds that may occur in 2021 (correct)
What is the effect of the second adjusting entry on the Cost of Merchandise Sold?
What is the effect of the second adjusting entry on the Cost of Merchandise Sold?
- It has no effect on the Cost of Merchandise Sold
- It eliminates the Cost of Merchandise Sold
- It increases the Cost of Merchandise Sold
- It decreases the Cost of Merchandise Sold (correct)
What is the initial balance of Customer Refunds Payable before the adjusting entries?
What is the initial balance of Customer Refunds Payable before the adjusting entries?
- $800 (correct)
- $715,409
- $7,000
- $5,000
What is the name of the account that is debited instead of Merchandise Inventory for the estimated returns?
What is the name of the account that is debited instead of Merchandise Inventory for the estimated returns?
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Where is Estimated Returns Inventory reported on the balance sheet?
Where is Estimated Returns Inventory reported on the balance sheet?
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What is the total amount of estimated refunds that may occur in 2021?
What is the total amount of estimated refunds that may occur in 2021?
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