Use the Information Given Above to Answer the Following Questions

question 44

Short Answer

Use the information given above to answer the following questions:
Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first 3 months of business.

-What do transactions (6A)and (6B)represent?
A) sale of goods on credit and later collection of cash
B) sale of goods on credit and for cash
C) receipt of cash and purchase of inventory
D) sale of goods for cash.

• A) sale of goods on credit and later collection of cash
• B) sale of goods on credit and for cash
• C) receipt of cash and purchase of inventory
• D) sale of goods for cash.

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Definitions:

Net Operating Income

A measure of a company's profitability calculated by subtracting operating expenses from operating revenues, excluding non-operating income and expenses.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Unit Product Cost

The total cost incurred to produce, market, and distribute a single unit of a product.

Variable Costing

This is an accounting method that only includes variable costs—costs that change with production volume—in the calculation of product cost.