Detailed records of goods held for resale are not maintained under a
perpetual inventory system.
periodic inventory system.
double entry accounting system.
single entry accounting system.
Inventory becomes part of Cost of Goods Sold when a company
pays for the inventory.
purchases the inventory.
sells the inventory.
receives payment from the customer.
Which of the following items does not result in an adjustment in the merchandise inventory account under a
A purchase of merchandise.
A return of merchandise inventory to the supplier.
Payment of freight costs for goods shipped to a customer.
Payment of freight costs for goods received from a supplier.
A company using a perpetual inventory system that returns goods previously purchased on credit would
debit Accounts Payable and credit Inventory.
debit Sales and credit Accounts Payable.
debit Cash and credit Accounts Payable.
debit Accounts Payable and credit Purchases.
Pilgrim’s Market recorded the following events involving a recent purchase of inventory.
- Received goods for $50,000, terms 2/10, n/30
- Returned $1,000 of the shipment for credit
- Paid $250 freight on the shipment
- Paid the invoice within the discount period
As a result of these events, the company’s inventory
increased by $48,020.
increased by $49,250.
increased by $48,265.
increased by $48,270.
Raleigh Company sells lumber. On October 14, 2009, Raleigh purchased inventory at a cost of $25,000 with
terms 2/10, n/30. The inventory was sold on account for $40,000 on October 21, 2009 with terms 1/10, n/30. The
accounts payable was settled on October 23, 2009 and the accounts receivable was settled on October 30, 2009.
Which statement was correct?
Cash was affected on October 14 and October 21.
Gross profit percentage is 62.5%.
On October 30, 2009, customers should remit cash in the amount of $39,600.
Financial information is presented below: