The liability created by a business when it purchases Materials from its suppliers on credit is termed as a. Account receivable b. Account payable c. Revenue d. Expense

Q: Which of the following would normally be classified as a Selling expense of Merchandising business?…

A: Merchandising business means business of purchase of goods from market and sale of goods to market.…

Q: Sales revenues are usually considered earned when Select one: a. goods have been transferred from…

A: Definition: Sales Revenue: Sales Revenue is considered as the income received from the sale of the…

Q: When a product is sold on credit, which account should be debited for the seller? A.cash…

A: Sale of a product means to sell the goods in stock to the customer. It can be sold either on cash or…

Q: Which of the following is classified as a general expense? U A) Depreciation costs of showroom O B)…

A: General expenses are different from selling and distribution expenses A) Depreciation costs of…

Q: A credit balance to a client's accounts payable account representing right to receive payment for…

A: Liabilities are of two types current and noncurrent liabilities. Current liabilities are to be…

Q: is an amount earned by business in the process of selling goods. O a. Expenses O b. Accounts…

A: The answer for the multiple choice question and relevant explanation are presented hereunder :

Q: Revenue is recorded when services have been performed or products have been delivered to customers.…

A: Introduction: Accounting Principals are created in order to increase the precision of financial data…

Q: 31-Which of the following would normally be classified as a Selling expense of Merchandising…

A: 31. d. Advertising expense

Q: Expenses related to office maintenance will be called as a. Sales Discount expense b. Selling…

A: (A) Sales Discount Expense: It is expense given to buyer of goods to incentivize his purchases. It…

Q: The subsidiary ledger that includes customer account activity is called the a. asset ledger b.…

A: Under subsidiary ledger, all activities related to customer is recorded.

Q: When does the cost of inventory become an expense?a. When cash is collected from the customerb. When…

A: Answer: b. When inventory is delivered to a customer

Q: The main difference between the income statements of a merchandising and a service type business is:…

A: SOLUTION EXPLANATION - A MERCHANDISING COMPANY ENGAGED IN PURCHASE AND RESALE OF TANGIBLE GOODS.…

Q: The amount to be paid by the business to the supplier who supplied the material on credit is a.…

A: When Company purchased goods and services on credit from the supplier then it needs to be paid back…

Q: accordance with IFRS 15,  customer loyalty awards on the goods or services sold, the transaction…

A: As per IFRS 15, Revenue recognition  In case of sale of a product with loyalty awards,then the sales…

Q: Which of the accounting controls ensure that a company's resources are used efficiently and…

A: Controls are the procedures which are designed and monitored by the management to ensure that the…

Q: e of an office building B. Depreciation of vehicles C. Maintenance of machinery D. Sales discount…

A: Income statement records income and expenses. It shows the net income or loss of a company for a…

Q: The current assets are :- a - ending raw materials inventory. b - account receivable. c - notes…

A: Current assets are assets that are in cash form or that can be converted into cash in short period…

Q: 2. Classify the following expenses if it is Selling and Distribution, Administrative, Finance…

A: The student was asked to provide an Answer for 2nd question hence answer is given to 2nd question…

Q: The journal entry to record the sale of services on credit should include:(a) Debit to debtors and…

A: A journal entry is used to record day-to-day transactions of the business by debiting and crediting…

Q: The liability created by a business when it purchases coffee beans and coffee cups on credit from…

A: Option (2) Accounts Payable is the correct answer

Q: When recognizing revenue, a company has a performance obligation when it agrees to receives cash…

A: Solution: When recognizing revenue, a company has a performance obligation when it agrees to…

Q: 2. Which Asset account/s appears in the Statement of Financial Position of a merchandising Business…

A: "Since you have asked multiple questions, we will solve only first question for you. If you want any…

Q: t is the amount earned by the business on the process of selling goods or performing services. a.…

A: Revenue means the amount earned by selling the goods or services. Unearned revenue means the amount…

Q: The current assets of FDN Company's Statement of Financial Position would have the following: Trade…

A: Current assets: Current assets are all those assets that are expected to be sold or used as a result…

Q: receipt of cash from customers in payment for products or services

A: First option is wrong because the prepaid expense is the expense paid in advance. A credit to…

Q: All else equal, when a firm purchases raw material on credit from its supplier, which of the…

A: Accounts payable is a liability reported in the balance sheet of the company. Whereas, accounts…

Q: A company regularly purchases materials from a manufacturer on credit. Payments for thesepurchases…

A: Current liabilities are those dues and obligations which needs to be settled by the business in…

Q: When recognizing revenue, a company has a performance obligation when it agrees to a. perform a…

A: A performance obligation is satisfied when the company delivered goods or performed services to…

Q: Revenue is earned when ​ ________.   A. the business has received cash from the customer   B. the…

A: The revenue recognition concept says that the business should recognize the revenue when the…

Q: Which of the following is an example of Current Asset of a Mobile shop Merchandise Business? a.…

A: A current asset is the assets that only include those assets that can be easily converted to money…

Q: inventory that it previously purchased. The entry to record that transaction should be: Group of…

A: The journal entries are prepared to record daily transactions of the business.

Q: When a payment is made to a supplier for goods previously purchased on account, the debit is to an…

A: Solution:- Discussion of clarification regarding payment is made to a supplier for goods previously…

Q: ccording to Generally Accepted Accounting Principles (GAAP), revenue is ncome when: a contract is…

A: According to Generally Accepted Accounting Principles (GAAP), Revenues are recognized as income when…

Q: Which of the following items is considered an original source document? Select one: a. accounts…

A: Source document In general source document which are used for the business transaction of the entity…

Q: Which of the following is an example of Current Asset of a Merchandise Business? a. Interest expense…

A: Current assets that are meant to be converted into cash or used within 12 months of period.

Q: Amounts owed for products or services purchased on account are called

A:

Q: Amount owed by the business to outsiders or whatever is payable by a company is known as ___. a.…

A: Balance sheet: It refers to a financial statement that shows all the liabilities, assets, and…

Q: Which of the following is not a revenue account? a. Professional fee b. Interest income c. Cost…

A: A revenue account is classified as an equity account and shall have a credit normal balance.

Q: When a company exchanges machinery and receives a trade-in allowance greater than the book value,…

A: Solution: When a company exchanges machinery and receives a trade-in allowance greater than the book…

Q: Selling expenses DOES NOT include: A. Advertising expense B. Making sales C. Accounting and Human…

A: Selling expense is the expense which involves any kind of cost that is incurred through the…

Q: All of the following accounts are presented under liabilities, except Accrued expenses Due to…

A: Liabilities are amounts that are owed by a firm while assets are amounts that are owed to a firm.

Q: How is cost of goods sold classified in the financial statements?a. As a revenueb. As an expensec.…

A: Cost of goods sold is the cost of goods that are being sold in that particular period. It is…

Q: 6. On an accrual basis under generally accepted accounting principles, revenue is recognized using…

A: Accrual concept in accounting says that all revenues that are earned in a particular accounting…

Q: The account that appears in the chart of accounts for a merchandising entity but not for service…

A: Merchandise Entity - In this type of entity corporation is mainly generate revenue through sale of…

Q: hen the seller advances the transportation costs and the terms of sale are FOB shipping point, the…

A: Solution: When the seller advances the transportation costs and the terms of sale are FOB shipping…

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.