Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
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Textbook Question
Chapter 5, Problem 5.38EX
Rules of debit and credit for periodic inventory accounts
Complete the following table by indicating for A through G whether the proper answer is debit or credit:
| Account | Increase | Decrease | Normal Balance |
| Purchases | debit | A | B |
| Purchases Discounts | credit | C | credit |
| Purchases Returns and Allowances | D | E | F |
| Freight In | debit | G | debit |
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Question:When recording a purchase of inventory on credit, which accounts are typically affected?
A) Debit Accounts Payable, Credit CashB) Debit Inventory, Credit Accounts PayableC) Debit Accounts Receivable, Credit SalesD) Debit Cash, Credit Inventory
Using a perpetual inventory system, the sale of inventory on account would be recorded as a. Debit Cost of Goods Sold; credit Inventory. b. Debit Inventory; credit Sales Revenue. c. Debit Accounts Receivable; credit Sales Revenue. d. Both a. and c. are correct.
When purchases of merchandise are made on account with a perpetual inventory system, the transaction is journalized with which entry?
a.debit Merchandise Inventory; credit Purchases
b.debit Merchandise Inventory; credit Cash Discounts
c.debit Merchandise Inventory; credit Accounts Payable
d.debit Accounts Payable; credit Merchandise Inventory
Chapter 5 Solutions
Corporate Financial Accounting
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - The credit period during which the buyer of...Ch. 5 - What is the meaning of (A) 1/15, n/60; (B) n/30;...Ch. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Who is responsible for freight when the terms of...Ch. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Assume that Audio Outfitter Inc. in Discussion...
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Elkhorn Company purchased...Ch. 5 - Prob. 5.3BECh. 5 - Prob. 5.4BECh. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Adjusting entries Halm Flooring Company uses a...Ch. 5 - Asset turnover ratio Financial statement data for...Ch. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of goods sold For a recent year,...Ch. 5 - Chart of accounts Monet Paints Co. is a newly...Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Purchase-related transactions Stylon Co., a...Ch. 5 - Prob. 5.8EXCh. 5 - Sales-related transactions, including the use of...Ch. 5 - Customer refund Senger Company sold merchandise of...Ch. 5 - Customer return and refund On December 28, 20Y3,...Ch. 5 - Sales-related transactions After the amount due on...Ch. 5 - Sales-related transactions The debits and credits...Ch. 5 - Prob. 5.14EXCh. 5 - Determining amounts to be paid on invoices...Ch. 5 - Prob. 5.16EXCh. 5 - Purchase-related transactions Based on the data...Ch. 5 - Prob. 5.18EXCh. 5 - Prob. 5.19EXCh. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Income statement and accounts for merchandiser For...Ch. 5 - Adjusting entry for inventory shrinkage Omega Tire...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On March 31, 20Y9,...Ch. 5 - Multiple-step income statement The following...Ch. 5 - Single-step income statement Summary operating...Ch. 5 - Closing the accounts of a merchandiser From the...Ch. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, the close of the...Ch. 5 - Prob. 5.33EXCh. 5 - Prob. 5.34EXCh. 5 - Prob. 5.35EXCh. 5 - Discount taken in next fiscal year Using the data...Ch. 5 - Prob. 5.37EXCh. 5 - Rules of debit and credit for periodic inventory...Ch. 5 - Journal entries using the periodic inventory...Ch. 5 - Identify items missing in determining cost of...Ch. 5 - Appendix Cost of goods sold and related items The...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Appendix 2 Cost of goods sold Identify the errors...Ch. 5 - Closing entries using periodic inventory system...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Purchase-related transactions using periodic...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Prob. 5.9APRCh. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Prob. 5.7BPRCh. 5 - Prob. 5.8BPRCh. 5 - Prob. 5.9BPRCh. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Comprehensive Problem 2 8. Net income: 741,455...Ch. 5 - Analyze and compare Amazon.com and Netflix...Ch. 5 - Analyze Dollar General Dollar General Corporation...Ch. 5 - Compare Dollar Tree and Dollar General The asset...Ch. 5 - Prob. 5.4MADCh. 5 - Analyze Home Depot The Home Depot (HD) reported...Ch. 5 - Prob. 5.6MADCh. 5 - Analyze J. C. Penney J. C. Penney Company, Inc....Ch. 5 - Prob. 5.1TIFCh. 5 - Prob. 5.2TIFCh. 5 - Prob. 5.5TIFCh. 5 - Prob. 5.6TIFCh. 5 - Prob. 5.7TIF
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which of the following accounts are used when recording a purchase using a periodic inventory system? A. cash, purchases B. accounts payable, sales C. accounts payable, accounts receivable D. cash, merchandise inventoryarrow_forwardFor each of the following accounts, identify whether the normal balance is a debit or a credit. Also specify whether the account is a contra account. a. Sales Returns and Allowances b. Merchandise Inventory c. Sales d. d Freight In e. Purchases Returns and Allowances f. Sales Tax Payable g. Purchasesarrow_forwardWhich of the following accounts are used when recording the sales entry of a sale on credit? A. merchandise inventory, cash B. accounts receivable, merchandise inventory C. accounts receivable, sales D. sales, cost of goods soldarrow_forward
- Which of the following is true about the Sales Returns and Allowances account? a. It is used to record the sale of merchandise. b. It is used to record the reduction of inventory. c. It is a contra account, deducted from sales. d. It is used to record discounts for prompt payment. e. None of the above.arrow_forwardPerpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual inventory system b. Periodic inventory system c. Both perpetual and periodic inventory systems Required: Match each option with one of the following: 1. Only revenue is recorded as sales are made during the period; the cost of goods sold is recorded at the end of the period. 2. Cost of goods sold is determined as each sale is made. 3. Inventory purchases are recorded in an inventory account. 4. Inventory purchases are recorded in a purchases account. 5. Cost of goods sold is determined only at the end of the period by subtracting the cost of ending inventory from the cost of goods available for sale. 6. Both revenue and cost of goods sold are recorded during the period as sales are made. 7. The inventory is verified by a physical count.arrow_forwardRefer to RE6-3. Assume Long records accounts receivable and sales using the net price method. Prepare the related journal entries for Long.arrow_forward
- Purchase-related transactions Based on the data presented in Exercise 5-16, journalize Balboa Co.s entries for (A) the purchase, (B) the return of the merchandise for credit, and (C) the payment of the invoice.arrow_forwardUnder the periodic inventory system, the ending inventory is entered by debiting Merchandise Inventory and crediting Income Summary.arrow_forwardWhat is the normal balance for each of the following accounts: (a) Purchases? (b) Sales Discounts? (c) Purchases Returns and Allowances? (d) Sales? (e) Purchases Discounts? (f) Sales Returns and Allowances?arrow_forward
- Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3.arrow_forwardWhich of the following is an example of a contra revenue account? A. sales B. merchandise inventory C. sales discounts D. accounts payablearrow_forwardBeginning inventory, purchases, and sales for Item Delta are as follows: Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on July 24 and (b) the inventory on July 31.arrow_forward
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