Accounting Exam 3 Practice

When goods are shipped FOB destination the seller pays

When goods are shipped FOB destination and the seller pays for transportation the buyer makes

When company A purchases merchandise from Company B terms FOB shipping what account does company a debit for transportation costs that are included on the invoice?

Inventory method that considers the inventory on hand to be composed of units of merchandise acquired most recently is

When merchandise sold is assumed to be in the order beginning with most recent purchases before earlier purchases, the inventory method is called

If the market price of inventory is rising over time (each time a company buys merchandise the cost is higher) which method of costing will yield the smallest cost of merchandise sold?

Sales Discounts: list account financial statement close out?

Merchandise Inventory

Sales

Net sales equation

Merchandise with an invoice price of $4,600 is purchased subject to terms of 2/10, n/30, FOB shipping point. The seller prepaid $75 for the cost of transportation. What is the amount that the purchaser records as the cost of the merchandise at the time of purchase?

Merchandise with an invoice price of $17,900 is sold subject to terms of 2/10, n/30, FOB shipping. The seller prepaid $158 for the cost of transportation. How much does the seller record in the Sales account at the time of the sale?

13. A sales invoice included the following information: merchandise price, $45,200; transportation, $1,500; terms 2/10, n/30, FOB destination. Assuming that merchandise that cost $3,100 is returned before it has been paid for, that the transportation is paid by the seller, and that the invoice is paid within the discount period, what is the amount of cash that buyer pays the seller?

A sales invoice included the following information: merchandise price, $76,500; transportation, $2,800; terms 1/10, n/30, FOB shipping. Assuming that merchandise that cost $3,300 is returned before it has been paid for, that the transportation is prepaid by the seller, and that the invoice is paid within the discount period, what is the amount of cash that buyer pays the seller?

A company has 11 units in inventory at the beginning of May and paid $40 for each unit. On May 2, the company buys 16 more units and pays $42 for each unit. On May 5, the company sells 19 units for $62 each. If the company maintains its inventory using LIFO, what is the cost of merchandise sold?

You are the BUYER. You purchase merchandise with a price of $8,200 on account, terms FOB destination, 1/10, n/30. The seller paid transportation costs of $260. You take advantage of the discount when you do make payment. Create a journal entry to purchase the merchandise

Make a payment for the merchandise

You are the SELLER. You sell merchandise on account for $11,500. The merchandise cost you $6,900. The terms are FOB shipping, 2/10, n/30. You receive a bill from UPS for $280 for transportation costs. The customer takes advantage of the sales discount when he pays you. Create a journal entry for the sale of the merchandise

Make a receipt of payment from the customer

You sold 10 units at $43 each. Create the journal entry for the sale. (using fifo chart)

You purchased 20 units at $30 each. create the journal entry for the purchase using lifo grid