In a periodic inventory system, recording a sale on account involves crediting which of the following accounts?
Which of the following will cause net income to be overstated for the following year?
A company with a liquid inventory will have:
In a perpetual inventory system, two entries are normally made to record each sales transaction. The purpose of these entries is best described as follows:
Many companies state in their annual reports that inventory is shown at the lower of its cost or market value. This means that the inventory:
The lower-of-cost-or-market rule:
Emerald Co. uses a perpetual inventory system and records purchases of merchandise at net cost. The company recently purchased 600 compact discs at an invoice price of $7,800 and terms of 4/10, n/30. Half of these discs had been mislabeled and were returned immediately to the supplier. The journal entry to record payment of this invoice after the discount period has expired will include a:
n/60. Half of the goods had been mislabeled and were returned immediately to the supplier. If Beacon Food pays the remaining amount of the invoice within the discount period, the amount paid should be:
At the beginning of 2015, Midway Hardware has an inventory of $390,000. Because sales growth was strong during 2015, the owner wants to increase inventory on hand to $450,000 at December 31, 2015. If net sales for 2015 are expected to be $1,860,000, and the gross profit rate