Chapter 5, Problem 5.3BE

(a)

To determine

Perpetual Inventory System: It 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.

To Record: The journal entries of sales and cost of goods sold using perpetual inventory system in the books of Company B.

(b)

To determine

To Record: The journal entries of sales return and reversal of cost of goods sold using perpetual inventory system in the books of Company B.

(c)

To determine

To Record: The journal entry for the cash received and discount allowed.