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Intermediate Accounting14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield 1,471 solutions Financial Accounting4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas 1,097 solutions Terms in this set (18)Because payment is made within 10 days of the invoice date, it is made within the discount period. As such, the buyer will subtract the discount before making the payment. (The buyer is said to be "paying in full" because nothing will be owed after payment is made.) Payment terms were 2/10, n/30 and because payment occurs within the discount period, the buyer reduces the amount due by 2% (or 0.02). In sum, the entry must: (1) Debit Accounts Payable for $4,000 (The amount due is $4,000 less returns and allowances of $0 (none).) (2) Credit Merchandise Inventory for $80 (The amount due of $4,000 × 2% discount.) (3) Credit Cash for $3,920 (The amount due of $4,000 less the $80 discount.) Other sets by this creatorRecommended textbook solutionsIntermediate Accounting14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield 1,471 solutions Essentials of Investments9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie 689 solutions Accounting: What the Numbers Mean9th EditionDaniel F Viele, David H Marshall, Wayne W McManus 338 solutions
Cost Accounting: A Managerial Emphasis15th EditionCharles T. Horngren, Madhav V Rajan, Srikant M. Datar 853 solutions - updates accounting records for purchases and sales of inventory only at the end of a period - The Purchases account is used during the period. - The Merchandise Inventory account is updated only at the end of the period. - The balance in the Merchandise Inventory account remains the beginning balance until the end of the period. - The Purchase Returns and Allowances account is used during the period. - The Purchase Discounts account is used during the period. - Cost of goods sold is computed at the end of the period. - when a sale is made the revenue but not the cost of goods sold is recorded Recommended textbook solutionsIntermediate Accounting14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield 1,471 solutions
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Essentials of Investments9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie 689 solutions What is merchandise inventory classified as on a balance sheet?Merchandise inventory is categorized as a current asset on the company's balance sheet.
How is inventory reported on the balance sheet quizlet?Inventory is usually reported as a long-term asset in the balance sheet. Inventory is typically reported as a current asset because companies expect to convert it to cash in the near term. Cost of goods sold is an asset reported in the balance sheet and inventory is an expense reported in the income statement.
Where is inventory classified in the financial statements quizlet?Inventory is classified as an asset in the balance sheet until it is sold, at which time the cost is transferred to cost of goods sold in the income statement.
What account type is merchandise inventory?What Type of Account Is Merchandise Inventory? Merchandise inventory is the account on a balance sheet that reflects the total amount paid for products that are yet to be sold. As a current asset, merchandise inventory is basically a holding account for inventory that's waiting to be sold.
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The merchandise Inventory account on a classified balance sheet is reported in the Quizlet
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