Determine the effect on a company’s Assets and Net Income from the following transaction: a company using the perpetual inventory method ships goods costing $5,000 to a customer FOB shipping point. The sale price is $8,000.
Assets | Net Income | |
---|---|---|
A | Decreased | Decreased |
B | Decreased | No effect |
C | Increased | No effect |
D | Increased | Increased |
E | None of the above |
Click Here to View All Chapters 5 & 6 Problems at Once | View | ||
1 | Consignment Inventory | Easy | |
2 | FOB Destination | Easy | |
3 | Inventory Set Aside | Easy | |
4 | Loss On Inventory | Easy | |
5 |
FOB Shipping
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Moderate | |
6 | FOB Shipping | Moderate | |
7 | Inventory Costing | Moderate | |
8 | Calculating Operating Income | Hard | |
9 | The Effect of Inventory Errors | Hard |
1 | The Multistep Income Statement | 12:44 | |
2 | Gross Profit vs Net Profit | 6:15 | |
3 | Profit Margin | 3:22 | |
4 | Net Sales | 10:03 | |
5 | COGS and Inventory | 2:57 | |
6 | Perpetual vs Periodic | 7:10 | |
7 | FOB Shipping? | 8:51 | |
8 | Transportation In | 8:41 | |
9 | COGS | 6:18 | |
10 | Drawbacks to Periodic | 6:07 | |
11 | Specific Identification | 2:17 | |
12 | Weighted Average | 4:21 | |
13 | FIFO and LIFO | 20:17 | |
14 | Estimating with Gross Profit | 7:23 |