Accounting 200 Exam 2 Review Rated 100% Correct!!

Which asset is most liquid (in accounting sense) - Cash The account, Sales returns and allowances, represents... - returned mechandise ABC offers 2/10 net 20. Which means... - The customer can take a 2 % discount if they pay in 10 days When goods or services are sold from one business to another on credit or sales are recorded at the gross amount, a sales discount.... - 1) Is offered so that the customer will pay the bill promptly 2) Is recorded as a contra-asset in sales The direct write off method for uncollectible account... - is acceptable, but inconsistant with the matching concept If a firm uses the periodic inventory system, an adjusting inventory is required to... - 1) adjust the ending inventory balance in the inventory account 2) close purchases to the inventory account 3) Close inventory to Cost of Goods Sold On the balance sheet, the allowance for uncollectible accounts is subtracted from account receivable to reflect the... - net accounts receivable During periods of rising prices, which inventory valuation best matches current inventory costs with current revenues? Assume the number of ending inventory units is at least as large as the number of beginning inventory units. - LIFO Deposits in transit are - deposits recorded in the firms cash ledger but not yet recorded by the bank The balance in a firms checking account is decreased by - 1) NSF checks