1. Briefly explain in your own words why discounts taken on purchases of inventory are properly deducted from the purchase price when calculating the amount that should be added to Merchandise Inventory.

4. When an employer records the regular payroll payments, there will be credits to FICASocial Security Payable and to FICAMedicare Payable. These same two accounts will also be credited when the employer records the payroll taxes. Why are these accounts credited twice for the same amounts?

5. A colleague who is not an accountant doesnt understand why you insist on making an adjusting entry to accrue warranty expenses before the product is actually returned for repair. Briefly explain why it is necessary to make this entry at the end of an accounting period