Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense reports the following selected amounts:           Accounts receivable $ 435,000 Debit Allowance for Doubtful Accounts   1,250 Credit Net Sales   2,100,000 Credit All sales are made on credit. Based on past experience, the company estimates 3.5% of ending account receivable to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?  

Lemming makes an $18,750, 120-day, 8% cash loan to Notions Co. on November 1. Lemming’s end-of-period adjusting entry on December 31 should be:

A company had sales of $350,000 and cost of goods sold of $200,000. Its gross profit equals $150,000.

A bank does not issue a debit memorandum to notify the depositor of which of the following?

The internal document prepared to notify the appropriate persons that goods ordered have been received, describing the quantities and condition of the goods is the:

Internal control in technologically advanced accounting systems depends less on the design and operation of the information system and more on the analysis of its resulting documents.

The allowance method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce.

Under a perpetual inventory system, when a credit customer returns non-defective merchandise to the seller, the seller debits Sales Returns and Allowances and credits Accounts Receivable and also debits Merchandise Inventory and credits Cost of Goods Sold.

The internal document prepared to notify the appropriate persons that goods ordered have been received, describing the quantities and condition of the goods is the: