Perpetual Inventory System Journal Entries

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which of the following is NOT a characteristic of a perpetual inventory system?

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1. The ABC Company purchased $500 of inventory on account that it will sell to its customer. If the company uses a perpetual inventory system, what journal entry will record this purchase?

2. The XYZ Company sold inventory that it purchased for $75 to its customer for $125 cash. What journal entry will XYZ Company record for this transaction?

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About This Quiz & Worksheet

These study assessments will gauge your comprehension of perpetual accounting journal entries. Answer questions on important study topics like the characteristics of a perpetual inventory system and a journal entry to record a purchase of inventory that will be sold to customers.

Quiz & Worksheet Goals

See how much you understand about:

  • A type of journal entry for a company that sold inventory for more than what it cost to buy
  • Calculating gross profit
  • Two types of inventory systems for recording inventory transactions

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the lesson on perpetual accounting journal entries
  • Information recall - access the knowledge you've gained regarding the two types of inventory systems
  • Knowledge application - use your knowledge to answer questions about how to calculate gross profit and the characteristics of a specific type of inventory system

Additional Learning

For more on the subject, we've created the lesson titled Perpetual Inventory System Journal Entries. These topics will be highlighted to help you grasp the material:

  • What inventory is
  • Examples of the two types of inventory systems and how they differ
  • Definition of 'revenue'
  • Sample scenario involving a small business owner using a perpetual accounting inventory system
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