A Merchandiser Had Sales Returns and Allowances of $300,sales Discounts

question 149

Multiple Choice

A merchandiser had sales returns and allowances of $300,sales discounts of $700,cost of goods sold of $14,000,and all other expenses of $4,400.The merchandiser uses a perpetual inventory system.The second entry in the closing process would include ________.

• A)a debit to Income Summary for $19,400
• B)a credit to Income Summary for $18,400
• C)a debit to Income Summary for $4,400
• D)a debit to Income Summary for $18,400

Identify the general assumptions underlying cost volume profit analysis and their implications.

Understand the concept and calculation of the weighted average unit contribution margin.

Determine sales dollars necessary to obtain a specific after-tax profit.

Calculate total contribution margin for a period.

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Definitions:

Investigative Expertise

Specialized skill or knowledge in conducting detailed and systematic examinations or inquiries.

Sound

A logical argument that is both valid and based on accurate premises.

Valid

Pertaining to an argument or claim that is logically sound and holds under scrutiny.

Unsound

Refers to an argument that either has false premises or does not follow a logical structure, leading to an unreliable conclusion.