On May 1, Sam Company sold S5,000 of inventory to Bob Company. The sale was made
ID: 2400915 • Letter: O
Question
On May 1, Sam Company sold S5,000 of inventory to Bob Company. The sale was made on account and Sam granted Bob credit tems of 2/10, n/30. The inventory cost Sam Company S3.000. On May 3, Bob retumed $1,000 of the inventory to Sam. The inventory returned by Bob cost Sam S600.) On May 9, Bob paid Sam in full for the amount due. 10. What account will Bob debit on May 1 if the periodic inventory system is used? a. Accounts Pavable b. Cost of Goods Sold c. Merchandise Inventory d. Purchases e. None of the above 11. What account will Bob debit on May 1 if the perpetual inventory system is used? a. Accounts Pavable b. Cost of Goods Sold c. Merchandise Inventory d. Purchases e. None of the above 12. What account will Sam debit on May 1 if the periodic inventory system, is used? a. Accounts Pavable b. Cost of Goods Sold c. Merchandise Inventory d. Purchases e. None of the above 13. What account will Sam debit on May 1 if the perpetual inventory system is used? a. Accounts Pavable b. Cost of Goods Sold c. Merchandise Inventory d. Purchases e. None of the above 14. What joumal entry will Bobrecord on May 3 if the periodic inventory system is used? a debit Accounts Payable, S1,000; credit Merchandise Inventory, S1,000. b. debit Accounts Payable, S1.000; credit Purchases, S1,000. c. debit Accounts Payable, S1,000; credit Purchase Discounts, $1,000. d. debit Accounts Payable, S1.000; credit Purchase Returms and Allowances, S1,000. e. debit Merchandise Inventory; S600; credit Cost of Goods Sold, S600. 15. What joumal entry will Bob record on May 3 if the perpetual imventory system is used? debit Accounts Payable, S1,000; credit Merchandise Inventory, S1,000. b. a debit Accounts Payable, S1.000; credit Purchases, S1,000. debit Accounts Payable, S1,000; credit Purchase Discounts, $1,000. d. c. debit Accounts Payable, S1.000; credit Purchase Returms and Allowances, S1,000. e. debit Merchandise Inventory; S600; credit Cost of Goods Sold, S600. 16. What joumal entry will Sam record gn May3 if the periodic inventory system is used? a debit Merchandise Inventory, S600; credit Cost of Goods Sold, S600. b. debit Sales, S1,000; credit Accounts Receivable, S1.000. c. debit Sales, S1,000; credit Cash, $1,000. d. debit Sales Retums and Allowances, S1,000; credit Accounts Receivable, $1,000. e. debit Sales Retums and Allowances, S1,000; credit Cash, $1,000.Explanation / Answer
10) purchase
in case of periodic system inventory updates inventory balance once in a period or on a particular period. note that the end of the period, the total in purchases account is added to the beginning balance of the inventory to compute cost of goods available for sale. The ending inventory is determined at the end of the period by a physical count and subtracted from the cost of goods available for sale to compute the cost of goods sold.
11) Marchendise inventory
in perpectual inventory system inventory and cost of goods sold are updated for each sale/purchase and return transaction. inventory is updated continously for each transaction. Under this system, no purchases account is maintained because inventory account is directly debited with each purchase of merchandise. The expenses that are incurred to obtain merchandise inventory increase the cost of merchandise available for sale. These expenses are, therefore, also debited to inventory account.
12) account recievable
if periodic inventory system is used , the sale is made on credit so the account is debited using account recievable instead of cash.
13) cost of goods sold
apart from periodic method cost of goods sold is debited becuase when the purchase id made inventory is recorded in cost of sales
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