Questions from General Accounting

Q: (a) What is the primary source document for recording (

(a) What is the primary source document for recording (1) cash sales and (2) credit sales? (b) Using XXs for amounts, give the journal entry for each of the transactions in part (a), assuming perpetua...

Q: Barten Corporation reported net sales $800,000; cost of

Barten Corporation reported net sales $800,000; cost of goods sold $520,000; operating expenses $210,000; and net income $68,000. Calculate the following values and explain what they mean: (a) profit...

Q: As the end of Petit Company’s fiscal year approached, it became

As the end of Petit Company’s fiscal year approached, it became clear that the company had considerable excess inventory. Ronald Morel, the head of marketing and sales, ordered salespeople to “add 20%...

Q: (a) Explain the control principle of independent internal verification.

(a) Explain the control principle of independent internal verification. (b) What practices are important in applying this principle?

Q: Luo Company has always provided its customers with payment terms of 1

Luo Company has always provided its customers with payment terms of 1/10, n/30. Members of its sale force have commented that competitors are offering customers 2/10, n/45. Explain what these terms me...

Q: In its year-end earnings announcement press release, Brantley Corp

In its year-end earnings announcement press release, Brantley Corp. announced that its earnings increased by $15 million relative to the previous year. This represented a 20% increase. Inspection of i...

Q: George Orear, a mid-level product manager for Theresa’s Shoes

George Orear, a mid-level product manager for Theresa’s Shoes, thinks his company should switch from LIFO to FIFO. He says, “My bonus is based on net income. If we switch it will increase net income a...

Q: Mark Elarton, director of marketing, wants to reduce the selling

Mark Elarton, director of marketing, wants to reduce the selling price of his company’s products by 15% to increase market share. He says, “I know this will reduce our gross profit rate, but the incre...

Q: Alison Hinck is studying for the next accounting midterm examination. What

Alison Hinck is studying for the next accounting midterm examination. What should Alison know about (a) departing from the cost basis of accounting for inventories and (b) the meaning of “market” in...

Q: Marcia Tague asks your help concerning an NSF check. Explain to

Marcia Tague asks your help concerning an NSF check. Explain to Marcia (a) what an NSF check is, (b) how it is treated in a bank reconciliation, and (c) whether it will require an adjusting entry o...