Using a perpetual inventory system, which journal entry(ies) is (are) prepared when two units of merchandise are sold on account? A. debit Accounts Receivable and credit Sales Revenue: debit Cost of Goods Sold and credit Inventory OB. debit Accounts Receivable and credit Sales Revenue; debit Inventory and credit Cost of Goods Sold O C. debit Cash and credit Sales Revenue: debit Cost of Goods Sold and credit Inventory O D. debit Accounts Receivable and credit Sales Revenue only

Using a perpetual inventory system, which journal entry(ies) is (are) prepared when two units of merchandise are sold on account? A. debit Accounts Receivable and credit Sales Revenue: debit Cost of Goods Sold and credit Inventory OB. debit Accounts Receivable and credit Sales Revenue; debit Inventory and credit Cost of Goods Sold O C. debit Cash and credit Sales Revenue: debit Cost of Goods Sold and credit Inventory O D. debit Accounts Receivable and credit Sales Revenue only

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 44E: Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual...

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Which of the following accounts are used when recording a purchase using a periodic inventory system? A. cash, purchases B. accounts payable, sales C. accounts payable, accounts receivable D. cash, merchandise inventory
Which of the following accounts are used when recording the sales entry of a sale on credit? A. merchandise inventory, cash B. accounts receivable, merchandise inventory C. accounts receivable, sales D. sales, cost of goods sold
Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual inventory system b. Periodic inventory system c. Both perpetual and periodic inventory systems Required: Match each option with one of the following: 1. Only revenue is recorded as sales are made during the period; the cost of goods sold is recorded at the end of the period. 2. Cost of goods sold is determined as each sale is made. 3. Inventory purchases are recorded in an inventory account. 4. Inventory purchases are recorded in a purchases account. 5. Cost of goods sold is determined only at the end of the period by subtracting the cost of ending inventory from the cost of goods available for sale. 6. Both revenue and cost of goods sold are recorded during the period as sales are made. 7. The inventory is verified by a physical count.
Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3.
Under the periodic inventory system, the ending inventory is entered by debiting Merchandise Inventory and crediting Income Summary.
Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3.
Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method. Present the data in the form illustrated in Exhibit 4.
Rules of debit and credit for periodic inventory accounts Complete the following table by indicating for A through G whether the proper answer is debit or credit:
Assume that the business in Exercise 7-5 maintains a perpetual inventory system, costing by the first-in, first-out method. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3.
Merchandise Accounting Merchandise Inventory Raw materials Work in process Finished goods Gross profit Net sales Sales revenue Cost of goods available for sale Cost of goods sold Perpetual system Periodic system Transportation-In Purchases FOB destination point FOB shipping point Gross profit ratio An adjunct account used to record freight costs paid by the buyer. A system in which the Inventory account is increased at the time of each purchase and decreased at the time of each sale. Terms that require the seller to pay for the cost of shipping the merchandise to the buyer. Terms that require the buyer to pay for the shipping costs. A system in which the Inventory account is updated only at the end of the period. Beginning inventory plus cost of goods purchased. An account used in a periodic inventory system to record acquisitions of merchandise. Sales revenue less sales returns and allowances and sales discounts. Cost of goods available for sale minus ending inventory. Gross profit divided by net sales. Net sales less cost of goods sold. The cost of unfinished products in a manufacturing company. The account wholesalers and retailers use to report inventory held for sale. The inventory of a manufacturer before the addition of any direct labor or manufacturing overhead. A manufacturers inventory that is complete and ready for sale. A representation of the inflow of assets from the sale of a product.
Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method. Present the data in the form illustrated in Exhibit 4.
Use the first-in, first-out method (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for B75 Company, considering the following transactions.