Journalize the following merchandise transactions. Refer to the Chart of Accounts for exact...

Question:

Journalize the following merchandise transactions. Refer to the Chart of Accounts for exact wording of account titles.

Mar 1Sold merchandise on account, $72,500 with terms 2/10, n/30. The cost of the merchandise sold was $43,500
9Received payment less the discount.
13Issued a credit memo for returned merchandise that was sold for $2,300 terms n/30. The cost of the merchandise returned was $1,600.

Inventory Systems:

In accounting, there are two costing systems used by companies in relation to their inventories: The periodic inventory system and the perpetual inventory system. Small companies typically use the periodic system while large companies use the perpetual inventory system. The main difference between the two is on the recording of the purchases account. In the periodic system, the account "Purchases" as well as its contra-accounts are used. In perpetual system, all purchases are recorded in the "Merchandise Inventory" account.

Answer and Explanation: 1

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Entries under a perpetual inventory system

Date General Journal Debit Credit
Mar. 1 Accounts receivable 72,500
Sales revenue ...

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Perpetual Inventory System: Definition, Advantages & Examples

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Chapter 1 / Lesson 15
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Perpetual inventory systems are used by businesses to monitor their inventories in real-time with the use of radio frequency identification, barcodes, point of sales, and other technological systems. Learn about the definition of a perpetual inventory system, the advantages of using this system, and some examples of perpetual inventory systems.


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