Under a perpetual inventory system, the cost of goods sold is determined each time a
sale occurs.
Answer:
Goodwill is not recognized in accounting unless it is acquired from purchasing another
business enterprise.
Answer:
Bell Food Store developed the following information in recording its bank statement for
the month of March.
‘”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”
(1) Checks written in March but still outstanding $7,000.
(2) Checks written in February but still outstanding $3,100.
(3) Deposits of March 30 and 31 not yet recorded by bank $5,200.
(4) NSF check of customer returned by bank $1,200.
(5) Check No. 210 for $593 was correctly issued and paid by bank but incorrectly
entered in the cash payments journal as payment on account for $539.
(6) Bank service charge for March was $50.
(7) A payment on account was incorrectly entered in the cash payments journal and
posted to the accounts payable subsidiary ledger for $824 when Check No. 318 was
correctly prepared for $284. The check cleared the bank in March.
(8) The bank collected a note receivable for the company for $3,000 plus $100 interest
revenue.
Instructions
Prepare a bank reconciliation at March 31.
Answer:
For a merchandising company, all accounts that affect the determination of income are
closed to the Income Summary account.
Answer:
The origins of accounting are attributed to Luca Pacioli, a famous mathematician.
Answer:
On July 1, 2015, Damlen Jurado Company pays $12,000 to its insurance company for a
2-year insurance policy.
Instructions
Prepare the necessary journal entries for Damlen Jurado on July 1 and December 31.
Answer:
During the month, a company sells goods for a total of $108,000, which includes sales
taxes of $8,000; therefore, the company should recognize $100,000 in Sales Revenues
and $8,000 in Sales Tax Expense.
Answer:
The reference column in a sales journal is used to indicate the general ledger account
number when the entry is posted.
Answer:
Your former college roommate is opening a new retail store and asks you ‘Which
inventory costing method should I use?’
What is your response? Include a comparison of the tax effect, balance sheet effect, and
income statement effect for FIFO versus LIFO.
Answer:
