EVALUATION: A company had the following transactions during December: • Sold merchandise on credit for P5,000, terms 3/10, n/30. The items sold had a cost of P3,500. 17 Purchased merchandise for cash, P720. • Purchased merchandise on credit for P2,600, terms 1/20, n/30. • Issued a credit memorandum for P300 to a customer who returned merchandise purchased on November 29. The returned items had a cost of P210. • Received payment for merchandise sold on December 1. • Received a credit memorandum for the return of faulty merchandise purchased on December 4 for P600. • Paid freight charges of P200 for merchandise ordered last month (FOB shipping point). • Paid for the merchandise purchased on December 4, less the portion that was returned. • Sold merchandise on credit for P7,000, terms 2/10, n/30. The items had a cost of P4,900. Received payment for merchandise sold on December 24.

Q: General entry purchase return

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

Q: List the steps to record sales under a perpetual inventory system as a buyer and a seller.

A: The accounting practice of perpetual inventory allows a company to keep continuous, real-time track…

Q: How do you enter an adjusting entry for Inventory?

A: Inventory adjustment Fluctuation in the inventory is a serious issue for a business entity. The…

Q: Differentiate between periodic and perpetual inventory system with the help of an example.

A: The monetary amount associated with the goods in inventory at the end of an accounting period is…

Q: How do you find the ending inventory?

A: Many companies earn revenue by selling inventory rather than a service. These companies are…

Q: Describe the alternative approaches for recording inventory write-downs.

A: Inventory write-down: As per GAAP (Generally Accepted Accounting Principles), the companies are…

Q: The Inventory account balance appearing in a perpetual inventory worksheet represents the

A: The products and materials that a company keeps on hand with the intention of reselling, producing,…

Q: Which journal entry is correct when there is a sale under a perpetual inventory and FOB shipping…

A: Solution- Accounts payable -------------------DR                 To Merchandise inventory. (To…

Q: Explain the ABC inventory management system and the just-in-time inventory managementsystem

A: The objective of this question is to understand two different inventory management systems: ABC and…

Q: Define Periodic inventory system.

A: Periodic inventory is a system of inventory in which updates are made on a periodic basis. This…

Q: Features of perpetual inventory system

A: Required  Features of perpetual inventory system?

Q: Why is it important to periodically take a physical inventory when using a perpetual inventory…

A:

Q: When recording a purchase of inventory on credit, which of the following correctly identifies the…

A: The objective of this question is to identify the correct debit and credit entries when recording a…

Q: he entry to record the sale of goods on account uses a perpetual system and comprises a

A: Here is the Answer:

Q: When recording purchase returns and purchase allowances under the periodic inventory system, what…

A: Periodic Inventory System:Periodic inventory system is a system in which the inventory is updated…

Q: Define Perpetual inventory system.

A: A perpetual inventory system updates and records the transaction as and when it occurs either at the…

Q: Describe the typical approach for recording inventory write-downs.

A: Inventory write-down: As per GAAP (Generally Accepted Accounting Principles), the companies need to…

Q: What account is debited when recording a purchase of inventory when using a periodic inventory…

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: Explain the inventory accounting system.

A: Inventory accounting is the body of accounting that used to valuing and accounting for changes in…

Q: How about perpetual inventory system

A: The difference between the recording of the inventory under periodic and perpetual inventory system…

Q: A perpetual inventory system has these characteristics:

A: Perpetual inventory is a technique in which the sale and purchases of stocks are recorded with the…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.