Homework Answers
OPTION - C
Inventory is reduced after each sale.
Because in perpectual cost of goods sold is calculated on transaction basis ie on purchase and sale whereas in periodic it is calculated on consolidated basis.
In both the inventory system the ending inventory units remains the same but the cost of goods sold varies and the value of ending inventory varies.
If you have any doubts please comment on the answer.
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10. In which way is a perpetual inventory system similar to a periodic system? A) Sales...
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Under the perpetual inventory system the Merchandise inventory account is continuously updated as purchases, sales, and relurns occur and under periodic inventory system the Merchandise inventory account slays as its beginning balance unti the physical inventory is recorded at the and of the accounting period. True False Under the perpetual inventory systerm, in addition to making the entry to record a sala, a company wouid: A. Debit Marchandise Inventory and credit Cost of Goods Sold B. Debit Cost of Goods...
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1. Which of the following is a characteristic of a perpetual inventory system? a. Inventory purchases...
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Under the perpetual inventory system the Merchandise inventory account is continuously updated as purchases, sales, and relurns occur and under periodic inventory system the Merchandise inventory account slays as its beginning balance unti the physical inventory is recorded at the and of the accounting period. True False Under the perpetual inventory systerm, in addition to making the entry to record a sala, a company wouid: A. Debit Marchandise Inventory and credit Cost of Goods Sold B. Debit Cost of Goods...
E8-7 Recording Purchases and Sales Using a Perpetual and Periodic Inventory System Demski Company reported beginning inventory of 100 units at a unit cost of $25. It engaged in the following purchase and sale transactions during 2007: Jan. 14 Sold 25 units at unit sales price of $40 on open account. April 9 Purchased 15 additional units at unit cost of $25 on open account. Sept. 2 Sold 50 units at sales price of $45 on open account. At the...
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