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ratelena [41]
2 years ago
15

A company is recording the disposal of accounts receivable with two different transactions. One transaction affects the balance

of two asset accounts and one stockholders' equity account, whereas the second transaction affects one asset account and two stockholders' equity accounts. Which of the following most accurately describes these transactions?
The first transaction records the sale of accounts receivable to a factor, whereas the second transaction records a sale that was paid using a national credit card.

The journal entry for the sale of receivables to a factor requires a debit to Cash (asset), a debit to Service Charge Expense (stockholders' equity), and a credit to Accounts Receivable (asset). Therefore, it affects two asset accounts and one stockholders' equity account. In contrast, the journal entry for a sale paid with a national credit card requires a debit to Cash (asset), a debit to Service Charge Expense (stockholders' equity), and a credit to Sales Revenue (stockholders' equity). Therefore, it affects one asset account and two stockholders' equity accounts. A sale made with a store credit card does not dispose of accounts receivable; instead, it increases Accounts Receivable and increases Sales Revenue.
Business
1 answer:
In-s [12.5K]2 years ago
6 0

The following statements more accurately describe the transactions:

- The first transaction records the sale of accounts receivable to a factor, whereas the second transaction records a sale that was paid using a national credit card.

- The journal entry for the sale of receivables to a factor requires a debit to Cash (asset), a debit to Service Charge Expense (stockholders' equity), and a credit to Accounts Receivable (asset). Therefore, it affects two asset accounts and one stockholders' equity account. In contrast, the journal entry for a sale paid with a national credit card requires a debit to Cash (asset), a debit to Service Charge Expense (stockholders' equity), and a credit to Sales Revenue (stockholders' equity). Therefore, it affects one asset account and two stockholders' equity accounts. A sale made with a store credit card does not dispose of accounts receivable; instead, it increases Accounts Receivable and increases Sales Revenue.

<u>Explanation</u>:

The assets owned by the company are recorded in the form of account known as <u>asset account</u>. Capital expenditures are debited to an asset account, and the expenditure is said to be capitalized. If the owner of the business increases the assets amount, the asset account will also be increased.

<u>Equity account</u> illustrates the financial representation of the ownership of a business. The payment made by the owner to the business or the earnings that are generated by the business are considered as equity. As the equity funds come from different sources, the equity is stored in multiple types of accounts.

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Shkiper50 [21]

Answer:

Manufacturing Margin: Manufacturing margin Is the difference between sales and the  variable cost of good sold .

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Net income: Net Income u the income after deducting all the expense, from the gross Income. It is also termed as net profit or net earning

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Manufacturing margin = Net sales - Variable cost of goods sold

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Thus, the manufacturing margin for the month of March is $438,000 .  

b. Computation of the contribution margin for the month of March:

Contribution margin = Manufacturing margin - Variable selling

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Contribution margin = $199,900

Thus, the contribution mar gm for the month of march is $199,900

c. Computation of the income from operations for the month of March:

Income from operations = Contribution margin - Fixed manufacturing costs - Fixed selling and administrative expenses

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Income from operations = $63,200

Thus, the income from operations for the month of March is $63,200.

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