Accounting 10 questions

Use book: Financial+&+Managerial+Accounting+13th+Ed

1. What distinguishes a merchandising business from a service business?

2. Can a business earn a gross profit but incur a net loss? Explain.

3. The credit period during which the buyer of mer-chandise is allowed to pay usually begins with what date?

4. What is the meaning of (a) 1/15, n/60; (b) n/30;   (c) n/eom?

5. How are sales to customers using MasterCard and VISA recorded?

6. What is the nature of (a) a credit memo issued by the seller of merchandise, (b) a debit memo issued by the buyer of merchandise?

7. Who bears the freight when the terms of sale are (a) FOB shipping point, (b) FOB destination?

8. Name three accounts that would normally appear in the chart of accounts of a merchandising business but would not appear in the chart of accounts of a service business.

9. Audio Outfitter Inc., which uses a perpetual in-ventory system, experienced a normal inventory shrinkage of $13,675. What accounts would be deb-ited and credited to record the adjustment for the inventory shrinkage at the end of the accounting period?

10. Assume that Audio Outfitter Inc. in Discussion Question 9 experienced an abnormal inventory shrinkage of $98,600. Audio Outfitter Inc. has decided to record the abnormal inventory shrink-age so that it would be separately disclosed on the income statement. What account would be debited for the abnormal inventory shrinkage?