Question

Question 08 (Part Level Submission) Inventory was purchased on credit in April and paid for in May by Lebel Ltée. Lebel sold and delivered the merchandise, along with an invoice, to a customer in June. The customer paid Lebel for the merchandise in July.

(a) In which month should Lebel record the sale as revenue and in which month should Lebel record the cost of goods sold as expense? The company should record the sale as revenue in the month of AprilMayJune . The company should record the cost of goods sold as expense in the month of AprilMayJune . When credit terms of 1/10, n/30 are offered, the discount period is 1 day. 10 days. 30 days. 20 days. Inventory becomes part of the cost of goods sold when a company receives payment from the customer. sells the inventory. pays for the inventory. purchases the inventory. Testbank, Question 76 Sales Allowances and Sales Discounts are both contra revenue accounts to Sales. both have a normal credit balance. both have a normal debit balance and are therefore regarded as expense accounts. are both designed to encourage customers to pay their accounts promptly. Which one of the following would not appear on a single-step income statement? expenses gross profit cost of goods sold sales revenues

Answer 1

1

The company should record the sale as revenue in the month of June

The company should record the cost of goods sold as expense in the month of June

2

When credit terms of 1/10, n/30 are offered, the discount period is 10 days.

1/10 indicates 1% discount is allowed if paid within 10 days

10 days is correct option

3

Inventory becomes part of the cost of goods sold when a company sells the inventory.

Sells the inventory is correct option

4

Sales Allowances and Sales Discounts are both contra revenue accounts to Sales.

Option A is correct

5

Gross profit would not appear on a single-step income statement.

Option B is correct