Understanding the difference between cash and profit (questions 4 – 5): The ABC Company recognizes credit sales of €100,000. The cost of the goods sold is €60,000. Answer the following two questions: What is the effect of the transaction described above on the cash account?

 
 
 
 
 
 
Other Questions Of This Category

What is the effect of the transaction described above on the profit and loss account?

Irwin Company obtained a five-year, €100,000 bank loan at the end of year x0. The principal had to be repaid in equal installments every December 31st starting in x1. The yearly interest rate is 4%…

For the remaining questions, please consider the following transactions that happened in The Dorchester Company Ltd. in 2015 (amounts in £000): · Credit sales amounted to 5,000 (nothing was paid by…

Fibertech GmbH is a distributor of outdoors technical clothing. The company outsources the production of clothing to external manufacturers in Bangladesh and sells the clothing under its own brands.…

Reviewing the Income Statement (questions 18 – 20) Vertikal SA imports and distributes climbing gear. Its profit and loss account for the year x5 has the following items (amounts in €000): · Debits:…

Which of the following statements is correct?

For the commercial company XYZ in year x2 we know that: (1) gross profit = €50,000; (2) Change in inventories is €30,000; and (3) Purchases of inventory = €180,000. Which of the following statements…

Revenue from credit sales (assume all sales were on credit). Tip: you can get this number from the Accounts Receivable T account.

Understanding how accounts relate to each other (questions 10 – 13): The managers of Moreton, Inc. prepared the following summaries of their company's assets and liabilities (amounts are in €…

Which of the following statements is correct?

Which of the following statements is correct?

Cost of goods sold

Understanding the Cash Flow Statement (questions 1 - 7): Which of the events described below for ZRH Companyis an operating activity?

Compute cost of goods sold in x2:

What is the Return on Sales (Net profit / Sales) of the company?