what effects occur on a retail store’s accounting equation when it records purchase of merchandise on account, assuming the use of a perpetual inventory system?

assets and liabilities increase More test answers on https://studyhippo.com/ch-6-accounting-56303/

Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of merchandise, costing $620, and sold for $960 on account?

B. Option B (Dr: A/R 960/ Cr: Sales Rev 960 More test answers on https://studyhippo.com/chapter-2-interm-acct/

Garden Company sold merchandise to Mamouth Industries on account for $3,450 with terms 2/10, n/30. The cost of merchandise sold was $1,850. Garden Company refunded Mamouth Industries $900 for returned merchandise. The cost of merchandise sold was $600. Which of the following will be recorded by Mamouth Industries in the journal entry for the return using the perpetual inventory system?

Credit to Merchandise Inventory, $882 More test answers on https://studyhippo.com/acct-ch-6/

Q 6.4: In the perpetual inventory system, which of the following is NOT a reason to take physical inventory? A : to determine ownership of the goods B : to check the accuracy of the records C : to determine losses due to employee theft D : to determine the amount of wasted raw materials

A : to determine ownership of the goods More test answers on https://studyhippo.com/orion-ch-6-reporting-and-analyzing-inventory/

When companies use a perpetual inventory system, the recording of the purchase of inventory will include a debit to purchases.

False More test answers on https://studyhippo.com/chapter-6-tf-test-answers/

Using a perpetual inventory system, the entry to record the sale of merchandise on account includes a

c. credit to Merchandise Inventory More test answers on https://studyhippo.com/chapter-6-accounting/

Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

Inventory Ledger More test answers on https://studyhippo.com/inventories/

a modern perpetual inventory system records the following:

units purchased and cost amount, units solids and sales and cost amounts, the quality of inventory on hand and its cost More test answers on https://studyhippo.com/accounting-chapter-5-test-answers/

A system that keeps track of each withdrawal or addition to inventory continuously is a. a fixed period system b. a perpetual inventory system c. a constant monitoring system d. a continuous inventory system

b. a perpetual inventory system More test answers on https://studyhippo.com/isds-3115-ch-12-inventory-management-conceptual/

Klein’s Shoe Company uses a perpetual inventory system. The beginning balance in its inventory account is $1,500 and the ending balance is $1,000. Cost of goods is $6,500. What was the amount of inventory purchased during the year?

6 More test answers on https://studyhippo.com/accounting-ch-5-56309/

Home Page Social Science Economics Finance Perpetual Inventory System

Perpetual Inventory System Flashcards, test questions and answers

Discover flashcards, test exam answers, and assignments to help you learn more about Perpetual Inventory System and other subjects. Don’t miss the chance to use them for more effective college education. Use our database of questions and answers on Perpetual Inventory System and get quick solutions for your test.

What is Perpetual Inventory System?

A perpetual inventory system is a type of inventory management that tracks the quantity and value of goods in real-time as they are bought, sold or used. This system uses data from sales, purchases, and any other transactions involving goods to keep an accurate account of current stock levels at all times. Perpetual inventory systems provide businesses with up-to-date information on their stock status and give them better control over their supply chain operations. The main advantage of using a perpetual inventory system is its accuracy; it eliminates the need for physical counts and provides more precise records than periodic inventories which rely on manual tracking methods. In addition, this type of system allows for easier analysis into trends such as product demand or seasonality so that businesses can adjust orders accordingly. Furthermore, since it offers automatic updates on stock levels and transaction details such as cost prices or supplier details, companies gain greater efficiency when monitoring their supply chains. Using a perpetual inventory system also reduces the risk associated with discrepancies between physical inventories due to theft, misplacement or inaccurate counting caused by human error. Moreover, it can save time spent manually recording products as well as reduce costs related to ordering mistakes or incorrect shipments caused by outdated information found in traditional approaches. Overall, a perpetual inventory system is beneficial for businesses looking to improve control over their supplies while streamlining processes related to purchasing and stocking merchandise. Not only does this method offer improved accuracy but it also helps organizations save money by avoiding costly errors associated with out-of-date records kept using traditional methods like periodic inventories. For these reasons, many businesses have adopted this approach when managing their stocks today in order to stay competitive in today’s market environment.