chapter 5.docx - Ball Company sells merchandise on account...

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Ball Company sells merchandise on account for ₤5,000 to Edds Company with credit terms of 2/10, n/30. Edds Company returns ₤1,000 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check? ₤4,000 ₤4,920 ₤3,920 ₤4,900 Reese Company purchased merchandise with an invoice price of $3,000 and credit terms of 1/10, n/30. Assuming a 360 day year, what is the implied annual interest rate inherent in the credit terms? 18% 36% 10% 12% Touch Tronix, Inc. sells component parts to Advanced Communications, Inc. a cell phone manufacturer. During December 10, 2017, Touch Tronix, Inc. sold €1,700,000 of goods to Advanced Communications, Inc. on account for €2,200,000. Advanced Communications, Inc. was dissatisfied with 25% of the merchandise it receives due to inferior quality. On December 21, 2017, Advanced Communications, Inc. returns the goods to Touch Tronix, Inc. for credit. Which of the following is true regarding the statement of financial position and the income statement for Touch Tronix, Inc. at December 31, 2017? Assets will increase by €550,000 and income will decrease by €550,000. Assets will decrease by €425,000 and income will decrease by €425,000. Assets will decrease by €125,000 and income will decrease by €125,000. Assets will increase by €425,000 and income will decrease by €425,000. Cole Company has sales revenue of ₤24,000, cost of goods sold of ₤16,000 and operating expenses of ₤6,000 for the year ended December 31. Cole's gross profit is
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₤0. ₤2,000. ₤8,000. ₤18,000. A company shows the following balances: Sales Revenue ¥1,500,000 Sales Returns and Allowances 270,000 Sales Discounts 30,000 Cost of Goods Sold 900,000 What is the gross profit rate? 25% 60% 40% 75% Rasner Co. returned defective goods costing $9,000 to Markum Company on April 19, for credit. The goods were purchased April 10, on credit, terms 3/10, n/30. The entry by Rasner Co. on April 19, in receiving full credit is: Accounts Payable 9,000 Inventory 270 Cash 9,270 Accounts Payable 9,000 Inventory 9,000 Accounts Payable 9,000 Purchase Discounts 270 Cash 8,730
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Accounts Payable 9,000 Inventory 270 Cash 8,730 A sales invoice is a source document that provides evidence of incurred operating expenses. provides support for credit sales. provides support for goods purchased for resale. serves only as a customer receipt. In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of inventory. sales discounts. freight-out. sales revenue Cartier Company purchased inventory from Pissaro Company. The shipping costs were $400 and the terms of the shipment were FOB shipping point. Cartier would have the following entry regarding the shipping charges: There is no entry on Cartier's books for this transaction. Freight Expense 400 Cash 400
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Inventory 400 Cash 400 Freight-Out 400 Cash 400 The respective normal account balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are credit, debit, debit.
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