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Each transaction must be analyzed in terms of its effect on the accounts before it can be
recorded in a journal.
Answer:
In computing cash payments for operating expenses, a decrease in prepaid expenses is
______________ and an increase in accrued expenses payable is ______________ to
(from) operating expenses, exclusive of depreciation.
Answer:
Management may choose any inventory costing method it desires as long as the cost
flow assumption chosen is consistent with the physical movement of goods in the
company.
Answer:
If net sales are $800,000 and cost of goods sold is $600,000, the gross profit rate is
25%.
Answer:
A merchandiser frequently has a need to use contra accounts related to the sale of
goods. Identify the contra accounts that have normal debit balances and explain why
they are not considered expenses.
Answer:
