Herndon Corp purchased merchandise on account from Likert Corp on November 18, 2016 . On November 21, 2016, Herndon returned damaged merchandise to Likert and was granted an adjustment on its account. Herndon uses the periodic inventory system. What effect does the merchandise return have on Herndon's accounting equation?
a. Assets and liabilities decrease.
b. Assets and stockholders' equity decrease.
c. Liabilities and stockholders' equity decrease.
d. Liabilities decrease and stockholders' equity increases.
d
You might also like to view...
Pro forma financial information shows what the significant effects might have been had a consummated or proposed transaction or event occurred at an earlier date
a. True b. False Indicate whether the statement is true or false
Variable costing is commonly used for internal reporting
Indicate whether the statement is true or false
Which of the following statements is true about behavioral checklist as an alternative appraisal method?
A. Descriptive ratings are less reliable than evaluative (good-bad) ratings. B. Behavioral checklist increases the cognitive demands placed on raters. C. Raters are provided with a series of statements that describe job-related behavior. D. Raters become reporters whose task is to describe job behavior.
Although not strictly illegal, the U.S. Justice Department frowns on reciprocity because the practice
A. restricts the normal operation of the free market. B. gives an unfair advantage to smaller companies. C. encourages free trade. D. reduces the amount of taxes paid by the parties involved. E. gives an unfair advantage to larger corporations.