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Solution To Question Here: Cash = 10% X 800 = $80 Accounts Payable = 800 – 80 = $720 The combined journal entry to record this Transaction is shown below:                                                    Desk a/c  $800                                                                    Cash a/c  $80                                                                    Accounts Payable a/c  $720                             ...

Solution To Multiple Choice Question (MCQ) After the merchant buys merchandise, it is sold at a higher price called the Selling Price (SP) because the goods or merchandise purchased at the cost price but sold by merchant or seller at selling price to get profit out of Sales . He earned a percentage of profit on every sales made to buyer during the accounting cycle. SP is equal to the cost plus gross profit while gross profit is the difference between SP and cost of the merchandise / goods / products as shown below: SP   =   Cost + Gross Profit Gross Profit  =  SP  -  Cost If the seller sells the goods at cost price, then at this point he gained no profit and suffered no loss called break even point. The difference between selling price and sale price is that SP is the price at which the goods is actually sold to buyer while sale price is the price of goods offered to buyer at a discount. In revenue discount, the Revenue is earned afte...

Computer consumables (CC) are computer-based products which are consumed up on regular basis such as CDs & DVSs, USB cables, ink cartridges, power adaptors, etc., which are necessary to perform various computer tasks such as storing data, printing documents, screen wiping / screen cleaning, using of camera, network cables and routers, etc. When a business incurred expenses for CC, then in Income Statement such expenses are categorized as computer consumables expenses in general administrator expenses. When these expenses are incurred only for business purposes, we debit computer consumables account and when these are closed to Income Summary Account , we credit these types of expenses in the books of accounts. To show these kinds of expenses in books of accounts, computer consumable account is created.

The expired portion of Capital Expenditure or direct cost is an Expense . So, the correct answer of this multiple choice question is (C), because in an expense, we may enjoy the benefit with the use of an asset. So, the expired portion of an asset, which may be enjoyed by the business with the passage of time, represents an expense. A business may start to gain benefits when an asset is utilized. An example of direct cost is arised in case of expiration of  Advance Rent paid for the cost production or business operations. Now, when the business uses the rent facilities, i.e., used the buildings for the production of goods or carrying on the operations, then the business may start to get benefits i.e., delivery of goods to customers, more sales due to attractive building, etc. With the beginning of expiration of the direct cost of prepaid rent. Such expired portion of prepaid rent is a rent expense account. In case of capital expenditure i.e., an addition to furniture, may p...

In Sales Journal , only credit sales or sales on account transactions are recorded while in Subsidiary Sales Journal, an individual or one single customer's sales transactions (sales on account transactions) are recorded. A sales journal is a Master Or Control Journal where all of the individuals or customers' subsidiary sales journal transactions are recorded collectively e.g., credit sales to Mr. A ($300) and to Mr. B ($500) are recorded in sales journal as shown below:                          Accounts Receivable a/c  $800                                                                    Sales a/c  800                                       (Sal...

A Bad Debt Expense (BDE) usually plus or positive because when it incurs, we debit it which is a positive or favorable side as expense increases on debit side. Bad debt expense can be minus or negative in case of credit as expense decreases on credit side when these are closed to Income Summary Account . In case of recovery of bad debt, we reverse the actual entry (which is a debit to BDE Account and a credit to Accounts Receivable Account ) of bad debt expense incurred i.e., a debit to accounts receivable account and a credit to BDE account. Now, the bad debt expense account shows negative balance as it is credited.

The correct answer of this Multiple Choice Question (MCQ) is D), as the Net Worth is the difference total assets minus total liabilities. It is calculated from the following Accounting Equation : Net Worth (Owner's Equity Or Capital)  =  Total Assets - Total Liabilities (Rights of Outsiders) Net worth is the rights of the owner against the assets of the business. The more the customer has assets greater than total liabilities, the more stronger' net worth (positive net worth) of the customer has during the period. However, negative net worth (liabilities are greater than assets) indicates that the business is unable to meet its external and internal liabilities which is not a good sign for running a smooth business. Assets are owned, possessed and controlled by the customer's business are enforced by valid claims against the rights from outsiders and owner of the business while liabilities are debts due which are payable to outsiders against the assets of the business....