21. Why are cash discounts given, and who benefits by these discounts? 22. a) What is the effect on the accounting equation of the seller of granting an "allowance" for merchandise...

21. Why are cash discounts given, and who benefits by these discounts?

22. a) What is the effect on the accounting equation of the seller of granting an "allowance" for merchandise that the customer is not satisfied with?

b) What is the effect of the above situation on the accounting equation of the purchaser?

For both questions, assume that the merchandise had been sold on account, and the invoice had not yet been paid.

23. Explain the difference in "transportation in" and "transportation out". Also indicate whether each is a product cost or period cost, and in which account costs are recorded.

24. How do gains and losses differ from revenues and expenses? How are they similar?

25. What type of financial statement matches sales revenue items with related expense items and distinguishes between recurring operating activities and nonoperating items such as gains and losses?