2. The entry to record the return of $25 of inventory to a supplier under the perpetual inventorysystem is recorded with a debit toaccounts payable and a credit to purchase discounts.Opurchase returns and allowances and a credit to accounts payable.Oaccounts payable and a credit to inventory.Oinventory and a credit to accounts payable.

Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Answered: 2. The entry to record the return of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The internal control questionnaire for purchases and accounts payable includes the following questions. Next to each of the questions, indicate the letter of the related transaction assertion.A. OccurrenceB. CompletenessC. AccuracyD. ClassificationE. Cutoff_______ 1. Are vendor's monthly statements reconciled with individual accounts payable accounts?_______ 2. Are all purchases made only on the basis of approved purchase requisitions?_______ 3. Are vendors' invoices listed immediately upon receipt?_______ 4. Are vendors' invoices matched against purchase orders and receiving reports before a liability is recorded?_______ 5. Is the accounts payable customer ledger balanced periodically with the general ledger control account?_______ 6. Does the accounting manual give instructions to date purchase entries on the date of receipt of goods?_______ 7. Are shipping documents authorized and prepared for goods returned to vendors?_______ 8. Is the accounts payable department notified of goods…
What account is debited when recording a purchase of inventory when using a periodic inventory system?
What accounts are used to recognize a retailer’s purchase from a manufacturer on credit?A. accounts receivable, merchandise inventoryB. accounts payable, merchandise inventoryC. accounts payable, cashD. sales, accounts receivable
A receiving report is filled out when we receive: An inventory shipment from a vendor. Items that a customer is authorized to return from a previous sale. A payment on a customer's account. a and b only. Answer is not the First option!
The trade discount on purchases is recorded A. O When it is received B.When the inventory is purchased C.When the inventory is sold D. O Not at all recorded in the books
If the balance in the inventory account is greater than the physical count, which of the following journal entries is recorded? a.Debit Merchandise Inventory and credit Inventory Short and Over b.Debit Merchandise Inventory and credit Cost of Goods Sold c.Debit Cost of Goods Sold and credit Merchandise Inventory d.Debit Inventory Short and Over and credit Merchandise Inventory
If each purchase and sale of merchandise is recorded in the inventory and the cost of merchandise sold accounts, the method of accounting for merchandise inventory is the: A perpetual method. B) periodic method. C) gross profit method. D) administrative method.
Which of the following needs an adjustment to the accounts receivable account of AB Company? a. a freight cost paid by the buyer for goods shipped FOB shipping point b. freight cost prepaid by the seller for good shipped FOB destination c. freight cost prepaid by the buyer for goods shipped FOB shipping point d. freight cost prepaid by the seller for goods shipped FOB shipping point
Terminology Match each phrase with its definition. A. Sales discount B. Credit period C. Discount period D. FOB destination E. FOB shipping point F. Gross profit G. Merchandise inventory H. Purchases discount 1. 2. 3. 4. 5. 6. 7. 8. Goods a company owns and expects to see to its customers. Time period that can pass before a customer's full payment is due. Seller's description of a cash discount granted to buyers in return for early payment. Ownership of goods is transferred when the seller delivers goods to the carrier. Purchaser's description of a cash discount received from a supplier of goods. Difference between net sales and the cost of goods sold. Time period in which a cash discount is available. Ownership of goods is transferred when delivered to the buyer's place of business. 1
The account used to adjust the perpetual inventory records when a difference exists between the physical count and the amount in the perpetual inventory records is called a. Inventory Short and Over. b. Estimated Returns Inventory. c. Inventory Shrinkage. d. Merchandise Inventory
Describe the recording process for purchases of merchandise inventory using a Perpetual inventory system.
Discuss how discounts are recorded in a perpetual inventory system, and compare how discounts are recorded in a periodic inventory system.

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