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When merchandise is purchased on account, the inventory account is increased to reflect the new stock, while Accounts Payable is also increased, indicating a liability to the supplier. This transaction does not immediately affect cash, as payment will be made later. The purchase will be recorded in the accounting system, impacting the company's balance sheet by increasing both assets and liabilities.
What else can I help you with?
What is the account classifaction of purchases?
It is a cost account because it is in the cost of merchandise division in the chart of accounts.
How should a return of merchandise purchased on account be recorded?
As a debit to the accounts payable account and a credit to the purchases returns and allowances account
When a customer charges merchandise he purchases what account are affected and how?
When a customer charges merchandise, two accounts are affected: Accounts Receivable and Sales Revenue. Accounts Receivable increases, reflecting the amount owed by the customer, while Sales Revenue also increases, indicating the income generated from the sale. This transaction reflects the company's right to receive payment in the future while recognizing the sale has occurred.
What accounts are affected and how when merchandise is purchased for cash?
no accounts, the only time an account would be affected is when you withdraw or deposit money into/from it, cash is nearly untraceable and does not affect your bank accounts
What two accounts are affected by the adjusting entry Merchandise Inventory?
The two accounts affected by the adjusting entry for Merchandise Inventory are the Merchandise Inventory account and the Cost of Goods Sold (COGS) account. When the inventory is adjusted to reflect the actual count or value, the Merchandise Inventory account is updated to show the correct ending balance, while the COGS account is adjusted to account for any changes in the total cost of inventory sold during the period. This adjustment ensures accurate financial reporting and inventory management.
What is the account classifaction of purchases?
It is a cost account because it is in the cost of merchandise division in the chart of accounts.
How should a return of merchandise purchased on account be recorded?
As a debit to the accounts payable account and a credit to the purchases returns and allowances account
When a customer charges merchandise he purchases what account are affected and how?
When a customer charges merchandise, two accounts are affected: Accounts Receivable and Sales Revenue. Accounts Receivable increases, reflecting the amount owed by the customer, while Sales Revenue also increases, indicating the income generated from the sale. This transaction reflects the company's right to receive payment in the future while recognizing the sale has occurred.
What accounts are affected and how when merchandise is purchased for cash?
no accounts, the only time an account would be affected is when you withdraw or deposit money into/from it, cash is nearly untraceable and does not affect your bank accounts
What two accounts are affected by the adjusting entry Merchandise Inventory?
The two accounts affected by the adjusting entry for Merchandise Inventory are the Merchandise Inventory account and the Cost of Goods Sold (COGS) account. When the inventory is adjusted to reflect the actual count or value, the Merchandise Inventory account is updated to show the correct ending balance, while the COGS account is adjusted to account for any changes in the total cost of inventory sold during the period. This adjustment ensures accurate financial reporting and inventory management.
Purchased merchandise on account 12000 fob shipping point seller added 485 of prepaid freight charges to the invoice how to journalize in purchases journal?
[debit] Merchandise account 12000 [Debit] Freight in 485 [Credit Accounts payable / cash 12485
What accounts affected in received payment on account?
"what accounts are affected and how when a payment on account is received from a customer
What is the journal entry of credit purchase?
[Debit] Purchases account [Credit] Accounts Payable
What is the journl entry for puchasing goods on account?
[Debit] Purchases [Credit] Accounts payable
What accounts are affected when paying on account?
When you pay on account, the entry is Cash - Debit Accounts Payable - Credit
When merchandise is returned under the perpetual inventory system the buyer would credit a. Accounts Payable b. Merchandise Inventory c. Purchases Returns and Allowances...?
The Buyer would likely perform the following transaction: DR- Account Receivable CR - Merchandise Inventory The Buyer would probably debit CASH if they receive CASH from the Seller instead of having to WAIT on it. The Merchandise Seller would perform the following transaction: DR - Merchandise Inventory CR - Accounts Payable, OR CASH
What account is affected in an account journal when you avail of purchase discount for office supplies that was bought on account?
Accounts payable and Cash accounts
