Perpetual Inventory System Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. Journal entries Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements. Accounting rules for journal entries: a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. To Record: Journal entries in the books of P Book Warehouse.

Question

On November 30, Sullivan Enterprises had Accounts Receivable of $145,600. During the month of December, the company received total payments of $175,000 from credit customers. The Accounts Receivable on December 31 was $98,200. What was the number of credit sales during December?

Answer 1

Question

Chapter 5, Problem 5.1AP

To determine

Perpetual Inventory System

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To Record: Journal entries in the books of P Book Warehouse.

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