On March 12, Korn Company sold merchandise in the amount of $7,800 to Babcock Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Korn uses the perpetual inventory system and the gross method of accounting for sales. On March 15, Babcock returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $350. Babcock pays the invoice on March 20, and takes the appropriate discount. The journal entry that Korn makes on March 20 is:

The Dividends account is normally closed by debiting it.

An account’s balance is the difference between the total debits and total credits for the account, including any beginning balance.

The right side of an account is called the debit side.

The materiality constraint looks at both the importance and relative size of an amount.

Which of the following is not a step in the accounting process?

Under the net method of recording purchases, the Discounts Lost account is used when the purchaser fails to take a discount offered by the seller.

The accounting equation can be restated as: Assets – Equity = Liabilities.

Wong Co. maintains a $300 petty cash fund. On January 31, the fund is replenished. The accumulated receipts on that date represent $80 for office supplies, $160 for merchandise inventory, and $20 for miscellaneous expenses. There is a cash shortage of $8. Based on this information, the amount of cash in the fund before the replenishment is:

During the month of July, Clarkson Industries issued a check in the amount of $845 to a supplier on account. The check did not clear the bank during July. In preparing the July 31 bank reconciliation, the company should: