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48. Which of the following statements is incorrect about perpetual inventory system? a. Inventory account is debited upon purchase b. One of the entries made to make up return of goods sold on account is Dr. inventory and Cr. cost of goods sold. c. Sales allowance granted to customer on account would require an entry debiting sales returns and allowance and crediting accounts receivable.

48. Which of the following statements is incorrect about perpetual inventory system? a. Inventory account is debited upon purchase b. One of the entries made to make up return of goods sold on account is Dr. inventory and Cr. cost of goods sold. c. Sales allowance granted to customer on account would require an entry debiting sales returns and allowance and crediting accounts receivable.

FINANCIAL ACCOUNTING
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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48. Which of the following statements is incorrect about perpetual inventory system? a. Inventory account is debited upon purchase b. One of the entries made to make up return of goods sold on account is Dr. inventory and Cr. cost of goods sold. c. Sales allowance granted to customer on account would require an entry debiting sales returns and allowance and crediting accounts receivable. d. A physical inventory is made at year-end in order to set up the cost of goods sold.
Transcribed Image Text:48. Which of the following statements is incorrect about perpetual inventory system? a. Inventory account is debited upon purchase b. One of the entries made to make up return of goods sold on account is Dr. inventory and Cr. cost of goods sold. c. Sales allowance granted to customer on account would require an entry debiting sales returns and allowance and crediting accounts receivable. d. A physical inventory is made at year-end in order to set up the cost of goods sold.
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