BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Under the perpetual inventory system, how does the seller record sales made on account?

images

To determine

Identify the correct entry that seller record for sales made on account under perpetual system.

Explanation

Perpetual inventory system:

The method or system of maintaining, recording, and adjusting the inventory perpetually throughout the year, is referred to as perpetual inventory system.

Justification for the incorrect answer:

Option a:

Under perpetual inventory system, when sales is made on account it affects the accounts receivable account by debiting the accounts receivable with the amount to be received and not accounts payable. Hence, it is an incorrect answer.

Option b:

Under perpetual inventory system, when sales is made on account it affects the accounts receivable account by debiting the accounts receivable with the amount to be received and not accounts payable. Hence, it is an incorrect answer.

Option c:

Under perpetual inventory system, when sales is made on account it affects the accounts receivable account by debiting the accounts receivable with the amount to be received and crediting the sales and cost of goods sold because the cost of goods sold will be recognised under the perpetual inventory system...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Define audit risk.

Accounting Information Systems

Why should policymakers think about incentives?

Principles of Microeconomics (MindTap Course List)

Under what conditions will a firm shut down temporarily? Explain.

Principles of Economics (MindTap Course List)

FREE CASH FLOW Financial information for Powell Panther Corporation is shown here. Powell Panther Corporation: ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)