BUISENESS MANAGEMENT
MERCHANDISING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Sales 6, 600Accounts receivable 6, 600
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Sales 6, 600Credit Accounts receivable 6, 600Cost of goods sold 4, 800Credit Merchandise Inventory 4, 800
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Accounts receivable 6, 600Sales 6, 600
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Accounts receivable 6, 600Credit Sales 6, 600Cost of goods sold 4, 800Credit Merchandise Inventory 4, 800
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Accounts receivable 4, 800Sales 4, 800
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Detailed explanation-1: -When companies sell merchandise inventory, the transaction requires two journal entries: the first entry records the revenue from the sale at the selling price and the second entry decreases the inventory account and records the expense of the sale at cost.
Detailed explanation-2: -A periodic system makes no attempt to monitor inventory totals; thus, cost of goods sold is unknown until the preparation of financial statements. The expense is found by adding the beginning inventory to the purchase costs for the period and then subtracting ending inventory.
Detailed explanation-3: -Companies using the periodic inventory method make no attempt to determine the cost of goods sold at the time of each sale. Instead, they calculate the cost of all the goods sold during the accounting period at the end of the period.