1. Wild\'s Flowers sells $400 of flowers for a wedding and the customer pays wit
ID: 2434748 • Letter: 1
Question
1. Wild's Flowers sells $400 of flowers for a wedding and the customer pays with a bank credit card (e.g., VISA). Wild's Flowers must pay 3% to the credit card company for credit card transactions. Which one of the following statement is correct (true) with respect to the recording of this sale on the books of Wild's Flowers?a) Sales is debited $400
b) Sales is credited $388.
c) Credit Card Discounts is debited $12.
d) Sales Discounts is debited $12.
2. Which one of the following is correct (true) with respect to inventory?
a) inventory is normally reported on the 3rd line, after A/R, in the current asset section of a classified balance sheet
b) a manufacturing firm has only one type of inventory, which is finished goods
c) if a company sells goods and agrees to pay the freight cost, this freight cost would be included in the COGS section of the company's income statement
d) goods in-transit at the end of the period, which were sold under terms FOB destination, should be included in the inventory of the buyer (and not the seller)
Explanation / Answer
1. Wild's Flowers sells $400 of flowers for a wedding and the customer pays with a bank credit card (e.g., VISA). Wild's Flowers must pay 3% to the credit card company for credit card transactions. Which one of the following statement is correct (true) with respect to the recording of this sale on the books of Wild's Flowers? b) Sales is credited $388. 2. Which one of the following is correct (true) with respect to inventory? a) inventory is normally reported on the 3rd line, after A/R, in the current asset section of a classified balance sheet
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