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. Adjusting entries : Adjusting entries are the journal entries that are recorded at an end of an accounting period. It adjusts the income and expense account to comply with the accrual based accounting. This accounting system states that the revenues should be recognized when it is earned, and the expenses should be recognized when it is incurred, irrespective to cash received or paid for it. 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. Closing entries: Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the accounting period, to transfer the final balance. Rules for closing entries : c) Debit the account : All temporary accounts with credit balances. d) Credit the account : All temporary accounts with debit balances To Record: (a) Adjusting entry for inventory and (b) Closing entries in the books of G Company.

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Answer 1

Question

Chapter 5, Problem 5.8E

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.

Adjusting entries:

Adjusting entries are the journal entries that are recorded at an end of an accounting period. It adjusts the income and expense account to comply with the accrual based accounting. This accounting system states that the revenues should be recognized when it is earned, and the expenses should be recognized when it is incurred, irrespective to cash received or paid for it.

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.

Closing entries:

Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the accounting period, to transfer the final balance.

Rules for closing entries:

c) Debit the account: All temporary accounts with credit balances.

d) Credit the account: All temporary accounts with debit balances

To Record: (a) Adjusting entry for inventory and (b) Closing entries in the books of G Company.

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Answer 2

Question

Chapter 5, Problem 5.8E

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.

Adjusting entries:

Adjusting entries are the journal entries that are recorded at an end of an accounting period. It adjusts the income and expense account to comply with the accrual based accounting. This accounting system states that the revenues should be recognized when it is earned, and the expenses should be recognized when it is incurred, irrespective to cash received or paid for it.

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.

Closing entries:

Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the accounting period, to transfer the final balance.

Rules for closing entries:

c) Debit the account: All temporary accounts with credit balances.

d) Credit the account: All temporary accounts with debit balances

To Record: (a) Adjusting entry for inventory and (b) Closing entries in the books of G Company.

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Answer 3

Question

Chapter 5, Problem 5.8E

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.

Adjusting entries:

Adjusting entries are the journal entries that are recorded at an end of an accounting period. It adjusts the income and expense account to comply with the accrual based accounting. This accounting system states that the revenues should be recognized when it is earned, and the expenses should be recognized when it is incurred, irrespective to cash received or paid for it.

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.

Closing entries:

Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the accounting period, to transfer the final balance.

Rules for closing entries:

c) Debit the account: All temporary accounts with credit balances.

d) Credit the account: All temporary accounts with debit balances

To Record: (a) Adjusting entry for inventory and (b) Closing entries in the books of G Company.

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Answer 4

Question

Chapter 5, Problem 5.8E

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.

Adjusting entries:

Adjusting entries are the journal entries that are recorded at an end of an accounting period. It adjusts the income and expense account to comply with the accrual based accounting. This accounting system states that the revenues should be recognized when it is earned, and the expenses should be recognized when it is incurred, irrespective to cash received or paid for it.

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.

Closing entries:

Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the accounting period, to transfer the final balance.

Rules for closing entries:

c) Debit the account: All temporary accounts with credit balances.

d) Credit the account: All temporary accounts with debit balances

To Record: (a) Adjusting entry for inventory and (b) Closing entries in the books of G Company.

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Answer 5

Chapter 5, Problem 5.8E

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.

Adjusting entries:

Adjusting entries are the journal entries that are recorded at an end of an accounting period. It adjusts the income and expense account to comply with the accrual based accounting. This accounting system states that the revenues should be recognized when it is earned, and the expenses should be recognized when it is incurred, irrespective to cash received or paid for it.

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.

Closing entries:

Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the accounting period, to transfer the final balance.

Rules for closing entries:

c) Debit the account: All temporary accounts with credit balances.

d) Credit the account: All temporary accounts with debit balances

To Record: (a) Adjusting entry for inventory and (b) Closing entries in the books of G Company.

Answer 6

Chapter 5, Problem 5.8E

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.

Adjusting entries:

Adjusting entries are the journal entries that are recorded at an end of an accounting period. It adjusts the income and expense account to comply with the accrual based accounting. This accounting system states that the revenues should be recognized when it is earned, and the expenses should be recognized when it is incurred, irrespective to cash received or paid for it.

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.

Closing entries:

Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the accounting period, to transfer the final balance.

Rules for closing entries:

c) Debit the account: All temporary accounts with credit balances.

d) Credit the account: All temporary accounts with debit balances

To Record: (a) Adjusting entry for inventory and (b) Closing entries in the books of G Company.

Answer 7

Chapter 5, Problem 5.8E

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.

Adjusting entries:

Adjusting entries are the journal entries that are recorded at an end of an accounting period. It adjusts the income and expense account to comply with the accrual based accounting. This accounting system states that the revenues should be recognized when it is earned, and the expenses should be recognized when it is incurred, irrespective to cash received or paid for it.

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.

Closing entries:

Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the accounting period, to transfer the final balance.

Rules for closing entries:

c) Debit the account: All temporary accounts with credit balances.

d) Credit the account: All temporary accounts with debit balances

To Record: (a) Adjusting entry for inventory and (b) Closing entries in the books of G Company.

Answer 8

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Answer 11

Ch. 5 - Prob. 1Q Ch. 5 - Prob. 2Q Ch. 5 - Prob. 3Q Ch. 5 - Prob. 4Q Ch. 5 - 5. When is cost of goods sold determined in a...Ch. 5 - 6. Distinguish between FOB shipping point and FOB...Ch. 5 - 7. Explain the meaning of the credit terms 2/10,...Ch. 5 - 8. Goods costing $2,000 are purchased on account...Ch. 5 - 9. Ming Xu believes revenues from credit sales may...Ch. 5 - 10. (a) What is the primary source document for...

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