Why is it important to understand shipping terms such as FOB destination or FOB shipping point? Why isit important to understand shipping terms such as FOB destination or FOB shipping point? Shippingterms determine when the customer must pay cash to the seller Shipping terms determine whether anypart of the sale is refundable to the customer Shipping terms determine the amount that the seller mustadd to the bad debt allowance account Shipping terms determine who owns the inventory at a givenmoment

Out of all the given choices, this statement: "Shipping terms determine who owns the inventory at a…

Answered: Why is it important to understand…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 18MC: Which two accounts are used to recognize shipping charges for a buyer, assuming the buyer purchases...

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Similar questions

Which of the following is an example of a contra revenue account? A. sales B. merchandise inventory C. sales discounts D. accounts payable
Which of the following is true about the Sales Returns and Allowances account? a. It is used to record the sale of merchandise. b. It is used to record the reduction of inventory. c. It is a contra account, deducted from sales. d. It is used to record discounts for prompt payment. e. None of the above.
Which of the following is not a characteristic of FOB Shipping Point? A. The buyer pays for shipping. B. The buyer owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
Which of the following accounts are used when recording the sales entry of a sale on credit? A. merchandise inventory, cash B. accounts receivable, merchandise inventory C. accounts receivable, sales D. sales, cost of goods sold
Which of the following is not included when computing Net Purchases? A. purchase discounts B. beginning inventory C. purchase returns D. purchase allowances
Under the perpetual inventory system, how does the seller record sales made on account?
Which two accounts are used to recognize shipping charges for a buyer, assuming the buyerpurchases with cash and the terms are FOB Shipping Point?A. delivery expense, cashB. merchandise inventory, cashC. merchandise inventory, accounts payableD. The buyer does not record anything for shipping since it is FOB Shipping Point.
Which of the following transactions would not result in an adjustment to the inventory account under a perpetual inventory system? a.The sale of merchandise for cash b.The sale of merchandise on credit c.The receipt of payment from a customer within the discount period d.The return of merchandise by a customer
Match the accounting term with its correct definition. Question 1 options: 1. contains deductions from purchases for items returned to suppliers, as well as deductions allowed by suppliers for goods that are not returned 2. means that the buyer takes delivery of goods being shipped to it by a supplier once the goods arrive at the buyer's receiving dock 3. gross profit divided by sales 4. the real - time balances in merchandise inventory and cost of goods sold are not known until the physical inventory is counted at the end of the accounting period 5. the difference between sales revenue and cost of goods sold 6. means that the buyer takes delivery of goods being shipped to it by a supplier once the goods leave the supplier's shipping dock 7. an offer from the supplier to the purchaser, to reduce the payment amount if the payment is made within a certain period of time 8. the merchandise inventory account and cost of goods sold account are updated immediately when transactions occur a.…
Terminology Match each phrase with its definition. A. Sales discount B. Credit period C. Discount period D. FOB destination E. FOB shipping point F. Gross profit G. Merchandise inventory H. Purchases discount 1. 2. 3. 4. 5. 6. 7. 8. Goods a company owns and expects to see to its customers. Time period that can pass before a customer's full payment is due. Seller's description of a cash discount granted to buyers in return for early payment. Ownership of goods is transferred when the seller delivers goods to the carrier. Purchaser's description of a cash discount received from a supplier of goods. Difference between net sales and the cost of goods sold. Time period in which a cash discount is available. Ownership of goods is transferred when delivered to the buyer's place of business. 1
Which income statement account(s) would be affected by a policy choice at the same time as the inventory balance sheet account. a. Bad debts expense b. Cost of goods sold expense c. Depreciation or amortisation expense d. Sales revenue
Which of the following accounts does not belong in the purchases and disbursement cycle? Group of answer choices a.Prepayments b.Accounts payable c.Sales returns and allowances d.Fixed assets

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