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Childers Company, which uses a perpetual inventory system, has an established petty cash fund in the amount of $400. The fund was last reimbursed on November 30. At the end of December, the fund contained the following petty cash receipts:         December 4 Freight charge for merchandise purchased $ 62 December 7 Delivery charge for shipping to customer $ 46 December 12 Purchase of office supplies $ 30 December 18 Donation to charitable organization $ 51 If, in addition to these receipts, the petty cash fund contains $201 of cash, the journal entry to reimburse the fund on December 31 will include:

A company had net sales of $600,000, total sales of $750,000, and an average accounts receivable of $75,000. Its accounts receivable turnover equals:

A buyer using a perpetual inventory system records the costs of shipping merchandise it purchases in a Delivery Expense account.

The three parties involved with a check are:

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

The use of the direct write-off method is allowed under the materiality constraint.

Winkler Company borrows $85,000 and pledges its receivables as security. The journal entry to record this transaction would be:

Companies can report credit card expense as a reduction in net sales or as a selling expense.

Axle Co.’s accounts receivable turnover was 9.9 for this year and 11.0 for last year. Betterman’s turnover was 9.3 for this year and 9.3 for last year. These results imply that:

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