Answer to Question #244132 in Accounting for nicole

Question

Directions: Answer the following questions with the most correct answer whether the selection is in multiple-choice or supply the answer.

7. Suppose Ms. Ellana has to owe you money for selling goods on May 12, 2021 and she

will be going to pay only on November 2, 2021, prove that your accounts receivable is

current in nature.

8. What is the normal balance of Bonds Payable?

9. Differentiate a service, merchandising, and manufacturing entity by providing 2 examples for each type of business.

Answer 1

7. The period between 12th May 2021 and 2nd November 2021 is less than one year. Hence, accounts receivable is

current in nature.

8. Bonds Payable fall in the non-current class of liabilities. When it is time to redeem the bonds, all premiums and discounts should have been amortized, so the entry is simply a debit to the bonds payable account and a credit to the cash account.

9. A service entity is a type of business that generates income by providing services to clients rather than selling physical products. Two examples of service industries include accounting firms and dental cleaning service.

A merchandising entity is a type of business that purchases finished goods and resells them to consumers. Two examples of merchandiser are wholesalers and retailers.

A manufacturing entity is a type of business that utilizes parts, components, or raw materials to produce finished goods, which are either sold directly to consumers or to merchandising firms. Two examples of manufacturing entities are automotive companies and shoemaking industries.