where a seller allows a purchaser to return goods that have defects damaged or

Where a seller allows a purchaser to return goods

This preview shows page 1 - 3 out of 3 pages.

where a seller allows a purchaser to return goods that have defects, damaged or any other reasons (Kimmel Np.). Purchase allowances, on the other hand, refer to allowances that a seller gives to the purchaser to keep goods that have been delivered but were nit ordered instead of doing a return.
Image of page 1
Insert Surname 2 b.) FOB Destination and FOB Shipping Point are the two types of shipping terms. In FOB Destination, the title of the goods is not transferred from the seller to the buyer until the delivery arrives at the destination of the buyer (Kimmel Np.). Under these terms, the seller is the one who pays for the freight since they are the owners of the merchandise. In FOB Shipping Point, the title of the goods is transferred from the seller to the buyer immediately the merchandise leaves the premises of the seller (Kimmel Np.). Under these terms, the buyer pays for freight since they are the owner of the merchandise. 3. The entry incase on credit can be: Debit Accounts Receivables - $800 Credit Accounts Revenue - $800 Assuming that we sold 4 units of the product at $200 each to 1 customer on credit with the buying price of the product being $70 each. Total sales = 4*$200 = $800 In case sales are made on credit, the company is required to create an accounts receivable which will appear in the ASSETS column in the balance sheet. Consequently, the company will identify revenue by crediting the account for Sales revenue. For booking the price of merchandise bought, the journal entry will be: Debit Cost of Goods sold - $280
Image of page 2
Insert Surname 3 Credit Merchandise Inventory - $280 Work Cited Kimmel, Paul D., et al. Financial Accounting . Wiley Custom Learning Solutions, 2016.
Image of page 3

You've reached the end of your free preview.

Want to read all 3 pages?

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors