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Question
Calculate: (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net income from the following:
Sales $1,300 Beginning Inventory $ 11
Sales Discount 5 Net purchases 1,050
Sales Returns & Ending Inventory 16
Allowances 15 Operating Expenses 100
Answer
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Related questions
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The return of merchandise was recorded as a debit to Accounts Payable and a credit to Purchases. This error would cause:
A) the period end assets to be understated.
B) the period end liabilities to be understated.
C) the period's net income to be understated.
D) None of these are correct.
Q:
The perpetual inventory system is a system which:
A) updates inventory continuously.
B) uses either FIFO, LIFO, weighted-average, or specific invoice method.
C) never needs a physical inventory taken.
D) both A and B.
Q:
The two methods of accounting for uncollectible receivables are the allowance method and the:
A) cost method.
B) interest method.
C) direct write-off method.
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The journal entry to write off an account judged to be uncollectible under the allowance would include a debit to:
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After aging the Accounts Receivable, it is estimated that $2,450 will not be collected and the allowance account has an existing debit balance of $300. If Accounts Receivable is $107,000, the net receivables would be:
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B) $106,900.
C) $104,550.
D) $104,250.
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Determine the amount of the adjustment for bad debts given:
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Prepare the adjusting journal entry of Bad Debts Expense from the following information using the income statement approach.
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Q:
Under the accrual method of accounting, the allowance method is generally required for financial reporting purposes.
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Using the balance sheet approach, the balance in Allowance for Doubtful Accounts is taken into consideration when finding the adjustment.
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Sigma reports net credit sales of $400,000. There is a credit balance of $1,000 in the Allowance for Doubtful Accounts. Uncollectible accounts are estimated to be 2.5% of net credit sales. Under the income statement approach, the adjusting entry would require a debit to Bad Debt Expense for:
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B) $9,000.
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When a year-end adjustment is made for estimated bad debts:
A) net income is increased.
B) liabilities increase.
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The balance in the Allowance for Doubtful Accounts is considered under which of the following approaches?
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Q:
Indy Sport and Hobby's Allowance for Doubtful Accounts had an unadjusted credit balance of $400. The manager estimates that $900 of the Accounts Receivable is uncollectible. Using the balance sheet approach, the year-end adjusting entry for Bad Debts Expense:
A) includes a credit to the Bad Debt Expense account for $500.
B) includes a debit to the Bad Debts Expense account for $900.
C) includes a credit to the Bad Debts Expense account for $1,300.
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Q:
The adjustment for bad debts using the percentage of receivables ignored the debit balance in the Allowance account. This error would cause:
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B) total liabilities to be understated.
C) net income to be understated.
D) None of these are correct.
Q:
Gross Accounts Receivable is $10,000. Allowance for Doubtful Accounts has a credit balance of $200. Net sales for the year are $150,000. In the past, 2% of sales had proved uncollectible, and an aging of the receivables indicates $1,200 is doubtful. Under the balance sheet approach, Bad Debts Expense for the year is:
A) $1,000.
B) $3,000.
C) $2,800.
D) $1,200.
Q:
The current balance of Allowance for Doubtful Accounts is considered when calculating the current period's Bad Debts Expense under the following approach:
A) direct write-off approach.
B) income statement approach.
C) balance sheet approach.
D) All of these answers are correct.
Q:
At December 31, 200x, Brooke's Horse Stable unadjusted Allowance for Doubtful Accounts showed a debit balance of $432. An aging of the Accounts Receivable indicates probable uncollectible accounts of $1,000. The year-end adjusting entry for Bad Debts Expense:
A) includes a debit to the Allowance account for $568.
B) includes a credit to the Allowance account for $42.
C) includes a debit to the Allowance account for $822.
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Q:
Prepare a partial balance sheet for the Meredith Company at December 31, 200x, from the following information:
Accounts Receivable $7,500
Allowance for Doubtful Accounts 300
Bad Debt Expense 2,000
Cash 12,000
Merchandise Inventory 3,500
Q:
The adjusting entry for uncollectibles is based on an estimate.
Q:
Reversing entries are recorded on the first day of the new accounting period.
Q:
The reversing entry for Salaries is:
A) debit Salaries Expense; credit Salaries Payable.
B) debit Salaries Payable; credit Income Summary.
C) debit Salaries Payable; credit Salaries Expense.
D) debit Salaries Expense; credit Cash.
Q:
Ending inventory is adjusted by debiting Merchandise Inventory and crediting Capital.
Q:
Adjusting journal entries still need to be made after the worksheet; otherwise the account balances will not be correct.
Q:
Closing entries:
A) are posted to the general ledger.
B) are done to update Cash.
C) can be done before adjusting entries.
D) All of the above are correct.
Q:
The trial balance columns on the worksheet are populated using the:
A) general journal.
B) general ledger.
C) subsidiary ledger.
D) None of the above.
Q:
The adjusted trial balance on the worksheet:
A) contains balances from the permanent accounts.
B) contains balances from the temporary accounts.
C) contains balances for all accounts with balances.
D) None of the above answers are correct.
Q:
Which of the following items generally has a credit balance in the income statement columns of the worksheet?
A) Purchase Returns and Allowances
B) Purchases
C) Accumulated Depreciation
D) Sales Discounts
Q:
Mortgage Payable is an expense account.
Q:
The ending inventory is adjusted by debiting Income Summary and crediting Merchandise Inventory.
Q:
The beginning inventory is adjusted by crediting Merchandise Inventory and debiting Income Summary.