For Each of the Following Events

question 49

Essay

For each of the following events:
(1)State whether the event increases (INC)or decreases (DEC)retained earnings.If the event does not affect retained earnings,state NE for no effect.
(2)State which equity account is affected.

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Definitions:

FOB Shipping Point

A term of sale indicating that the buyer assumes responsibility for shipping costs and risk of loss once the seller has delivered the goods to the shipping carrier.

Sales Discount

A reduction in the price of a product or service offered to customers, typically to prompt early payment or bulk purchases.

Cash Returns

Financial returns or profits that are received in the form of cash, as opposed to stock dividends or other non-liquid forms of return.

Inventory

Goods and materials held by a company for the ultimate goal of resale or production, including raw materials, work-in-progress, and finished goods.