When merchandise was shipped by the consignor to the consignee and freight on shipment was paid by the latter, then: Sale is properly recognized by the consignor. The cost per unit of the merchandise will eventually increase. Freight in is properly recognized by the consignee. The consignee, upon receipt of the goods, is already

When merchandise was shipped by the consignor to the consignee and freight on shipment was paid by the latter, then: Sale is properly recognized by the consignor. The cost per unit of the merchandise will eventually increase. Freight in is properly recognized by the consignee. The consignee, upon receipt of the goods, is already

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 8QY: If the seller assumes the entire cost of transportation, without any reimbursement from the buyer,...

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Under the realization principle, revenue from sale of products is recognized a. At date of delivery to the customers C. When the customers are billed b. When the inventories are readied for shipment D. Upon receipt of cash payment
Revenue is recognized for sold consignment goods when a. The consignee receives the goods b. When the consignment contract has been agreed upon c. The goods are sold by the consignee to the final customers d. When the consignment contract has been signed by both parties
For sellers of goods, the revenue recognition principle generally requires that revenues be recorded when the following conditions are met: The item is manufactured When the goods are received by the buy The sales order is received ● When title and risks of ownership pass to the buyer.
When goods are sold on a bill-and-hold basis, what conditions must be met to recognize revenue upon receipt of the order?
If the sale includes the seller paying the freight costs and assuming the responsibility for merchandise until it is received by the buyer, the freight terms are said to be: A FOB shipping point. В FOB destination. (c) sales discount. D) trade discount.
If the seller assumes the entire cost of transportation, without any reimbursement from the buyer, the freight terms are considered ______________. a. FOB shipping point b. FOB destination c. Freight in d. Freight out e. FOB freight
The realisation concept determines when goods sent on credit to customers are to be included in the sales figure for the purpose of computing the profit or loss for theaccounting period. Which of the following tends to be used in practice to determine when to include a transaction in the sales figure for the period. When the goods havebeen:a. dispatched b. invoiced c. delivered d. paid forGive reasons for your answer.
Choose the best answer. 1.Under a consignment arrangement, the consignor recognizes net revenue equal to the gross sales price less the consignee's commission. * a.True b.False 2.A consignor recognizes revenue when the consigned goods are transferred to the consignee. * a.True b.False 3.If another party is primarily responsible for fulfilling a contract with a customer, this may indicate that the entity is an agent. * a.False b.True 4.Pinewood Co. agrees to create an artifcat for Saga Co. Pinewood is primarily liable for the artifact's conformance with the customer's specifications. Pinewood does not have the required expertise so its subcontracts Saleng Co. to do the manufacturing. If the entire manufacturing process is outsourced from Saleng Co., Pinewood would be acting as an agent of Saleng. * a.True b.False 5.Fight Club Co. enters into a contract with Tough Co., a promoter of mixed martial arts (MMA) fights. Under the contract, Fight Club Co. purchases MMA event tickets from Tough…
t is generally agreed that sales revenue should only be ‘realized’ and so ‘recognized’ in the trading, profit and loss account when:1. The sale transaction is for a specific quantity of goods at a known price, so that the sales value of the transaction is known for certain.2. The sale transaction has been completed, or else it is certain that it will be completed (e.g. in the case of long-term contract work, when the job is well under way but not yet completed by the end of an accounting period).3. The critical event in the sale transaction has occurred. The critical event is the event after which: i) It becomes virtually certain that cash will eventually be received from the customer.ii) Cash is actually received.Usually, revenue is ‘recognized’i) When a cash sale is made.ii) The customer promises to pay on or before a specified future date, and the debt is legally enforceable.The prudence concept is applied here in the sense that revenue should not be anticipated, and included in the…
Which of the following conditions would support recognition of revenue? The seller’s price to the buyer is being negotiated. Delivery has occurred or services have been provided. Collection is possible. Significant risks and rewards of ownership of the goods will soon be transferred to the purchaser by the seller.
Under PAS 18, the date when revenue from consignment sales must be properly recognized by the consignor is when: A. Remittance was made by the consignee to the consignor. B. Merchandise was shipped to the consignee by the consignor and the same was acknowledged by the former. C. Notification about sale of consigned goods was received by the consignor. D. A sale was made by the consignee to third party.
True or false 1. Net sales is equal to sales revenue plus sales returns and minus sales discounts 2. FOB shipping point means title to the goods passes to the purchaser upon receipt of the goods and the seller is responsible for the cost of the freight