ACC 201 WORKSHOP THREE MERCHANDISING TRANSACTIONS HANDOUT FOR 3.4 DROPBOX
Download Merchandising Transactions Handout for 3.4 Dropbox Review the questions below. As you watch the video Merchandising Income Statement and Transactions, take notes and answer the following questions for Dropbox submission:
Question 1. What do you call the difference between sales of merchandise and the cost of goods sold? 2.
What is the source document used for determining who is responsible for shipping costs of purchased merchandise? 3. What is the accounting entry for a discount taken when an invoice is paid within the discount period for merchandise purchases? Is it a debit or credit and to which account? 4. What effect does an entry to the sales discount account have on sales? 5. Explain why shipping costs for incoming inventory should be considered an asset until the inventory is sold. How do you justify this entry instead of accounting for the shipping costs as an expense in the period incurred?
Question
6.
What is a contrarevenue account?
7. Why is it important to keep separate accounts for returns and allowances?