Under the periodic inventory system, which of the following is a correct closing entry? A) Income summary, debit; Sales, credit B) Income summary,  credit; Sales Returns and Allowances, debit C) Income Summary, debit; Merchandise Inventory (beginning), credit D) Purchases, debit, Income Summary,  credit

What is the difference in reporting requirements for customer-returned merchandise in sellable condition under a perpetual inventory system versus a periodic inventory system?

Which of the following describes features of a perpetual inventory system? A. Technology is normally used to record inventory changes. B. Merchandise bought is recorded as purchases. C. An adjusting journal entry is required at year end, to match physical counts to the asset account. D. Inventory is updated at the end of the period.

Under the retail inventory method, freight-in would be included in the calculation of the goods available for sale for which of the following?

This type of inventory system does not require an entry to Merchandise Inventory until a physical inventory has been taken. a. Periodic inventory system b. Perpetual inventory system c. Merchandise inventory system d. Beginning inventory system e. Ending inventory system

Perpetual 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.

Which of the following financial statements would be impacted by a current-year ending inventory error, when using a periodic inventory updating system? A. balance sheet B. income statement C. neither statement D. both statements

On which financial statement would the merchandise inventory account appear? A. balance sheet B. income statement C. both balance sheet and income statement D. neither balance sheet nor income statement

Which 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 sold

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 last-in, first-out method. Present the data in the form illustrated in Exhibit 4.