Unit $2$ Exam

REMEMBER TO SHOW AND LABEL ALL CALCULATIONS

Question $1.$ What is the Account Type for each account? Also indicate it the account is used in buyer, seller, or both types of entries by placing an $x$ in the appropriate column.

$\backslash$table$[[$Account Name,Account Type,Used by Buyer,Used by Seller$],[$Sales Returns & Allowances,,,$],[$Imventory$,,,],[$Sales Discounts,,,$],[$Accounts Recelvable,,,$],[$Accounts Payable,,,$],[$Cost of Goods Sold,,,$],[$Delivery Expense,,,$],[$Cash$,,,]]$

Question $2$: Prepare the appropriate journal entries for each of the transactions for Your Company. ROUND ALI ANSWERS TO $2$ DECIMAL. PLACES.

a$.$ Purchased $280$ inventory items for $$32$ each with terms $\frac{4}{15},$ N$4$S and FOB Destination.

DEBIT

CREDIT

$\backslash$table$[[$Points Avallable:,$8],[$Points Eamed:,$]]$

b$.$ Sold $163$ inventory items to ABC Company for $$42\mathrm{.}2$ each with terms $\frac{3}{10},N30$ and FOB Shipping Point.

DEBIT

CREDIT

$\backslash$table$[[$Points Available:,$12],[$Points Earned:,$]]$

c$.$ ABC Company paid the amount due from the sale in transaction $B$ with a discount.

DEBIT

CREDIT

d$.$ Your Company paid for the purchase in transaction a taking the early payment discount.

DEBIT

CREDIT

Question $3$: Explain the difference between a RETURN and an ALLOWANCE. Would there be a difference in how w$.$ rarard this as the buyer? Would there be a difference in how we record this as the seller? Explain.

$\backslash$table$[[$Points Available:,$9],[$Points Earned:,$]]$

Question $4$: A customer purchases $$5,000$ of merchandise which cost the seller $$3,500.$ The customer found the units provided were not the correct color. After negotiation, the buyer decides to keep the merchandise. The seller will credit $$630$ of the amount owed for the error and inconvenience. Prepare the entry $($or entries$)$ the Buyer would record for this allowance?

Account Name

Debit

Credit

$\backslash$table$[[$Points Available:,$5],[$Points Earned:,$]]$