week5 acc225 dq1 and 2

week5 acc225 dq1 and 2 - far. DQ2 Amy is not being very...

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DQ1 Main items which show up the merchandising organization which do not show up on the service company statements are as follows: Merchandising Inventory Price of Items Sold Purchases and Purchases Returns Allowances and Transportation In Sales and Sales Earnings The reason for the difference is that Service Organizations make money by providing facilities. They do not buy inventory that has to be sold to consumers. That is why they do not need any of the above mentioned accounts to be created for them. The merchandiser has to account for goods and goods sold, cost of goods, gross and net profit, and also expenses. So basically one has products and one does not, so one has to report or account for the products and interactions of such products and one does not. Is there anything that I am missing on this one class, help me out. Hope everyone is having a wonderful week so
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Unformatted text preview: far. DQ2 Amy is not being very ethical. Her actions are the same as if she were stealing. She purchases the merchandise because she wants it but she does not want to pay for it. If that company keeps track there returns from individuals she could no longer be allowed to shop at that company and they would no longer allow her to return items. I am not sure if she could face prosecution for her actions. Financially, the company would have to DR its sales returns and allowance for the purchase amount and CR accounts receivable. If the merchandise can be resold then they can DR merchandise inventory and CR cost of goods sold. If the merchandise is no longer able to be resold they would DR merchandise inventory for the value not the cost, DR loss from defective merchandise for the rest of the cost and CR cost of goods sold for the retail value....
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This note was uploaded on 06/19/2011 for the course ACCT 225 taught by Professor Laurathomas during the Spring '10 term at University of Phoenix.

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