Intermediaries play an important role in matching supply and demand by providing consumers with a broad assortment of products in small quantities.
When goods are produced or manufactured by producers, there will be need to make those goods available to final consumers.
The intermediaries- Wholesalers and retailers buys these goods from the producers and make them available to final consumers in small quantities.
By making the goods available to consumers, the intermediaries are playing important role in matching supply and demand by providing consumers with a broad assortment of products in small quantities.
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Cost drivers refer to the activities that cause changes in activity costs, it is any factor that make the cost of an activity to change, either increasing or decreasing. Cost driver is a concept that is used in Activity Based Costing and it is based on the belief that activities result in costs. In the question given above, the correct option is D. This is because, the number of pounds of product shipped will determine the cost to be paid for shipping.
Answer:
May 5
Merchandise Inventory $6,000 (debit)
Freight Charges $100 (debit)
Accounts Payable : Archie Co. $6,000 (credit)
Cash $100 (credit)
May 12
Accounts Payable : Archie Co. $2,500 (debit)
Merchandise Inventory $2,500 (credit))
May 14
Accounts Payable : Archie Co. $3,500 (debit)
Discount Received $70 (credit)
Cash $3,430 (credit)
Explanation:
May 5
Recognize the Assets of Merchandise and a Liability : Accounts Payable : Archie Co. as a result of purchase.
Also Recognize the Freight Expenses since this is a F.O.B delivery
May 12
De-recognize the Liability : Accounts Payable - Archie Co. and the Merchandise Inventory asset to the extend of Merchandise returned to Archie Co.
May 14
De-recognize the Liability : Accounts Payable : Archie Co. of $3,500 and the Cash assets to the extend of Payment made to Archie Co less cash discount of $3,430 .
The effect this error would have on the trial balance would be when the trial balance is completed, the amount in the debit column will be more than the amount in the credit column by $13,000.This is further explained below.
<h3>What is a trial balance?</h3>
Generally, In a double-entry accounting system, if there is a discrepancy between the debits and credits, it means there was a mistake.
In conclusion, If this mistake is included in the final trial balance, it will cause the debit column to exceed the credit column by $13,000. You may learn more about this in the sections below.
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