60.1K

Verified Solution

Link Copied!

Use the following information to answer the next 11 questions, SELECT ALL ANSWERS THAT APPLY.

On May 1, Sam Company sold $5,000 of inventory to Bob Company. The sale was made on account and Sam granted Bob credit terms of 2/10, n/30. The inventory cost Sam Company $3,000. On May 3, Bob returned $1,000 of the inventory to Sam. (The inventory returned by Bob cost Sam $600.) On May 9, Bob paid Sam in full for the amount due.

1.What account will Bob debit on May 1 if the periodic inventory system is used?

a.Accounts Payable

b.Cost of Goods Sold

c.Merchandise Inventory

d.Purchases

e.None of the above

2.What account will Bob debit on May 1 if the perpetual inventory system is used?

a.Accounts Payable

b.Cost of Goods Sold

c.Merchandise Inventory

d.Purchases

e.None of the above

3.What account will Sam debit on May 1 if the periodic inventory system, is used?

a.Accounts Payable

b.Cost of Goods Sold

c.Merchandise Inventory

d.Purchases

e.None of the above

4.What account will Sam debit on May 1 if the perpetual inventory system is used?

a.Accounts Payable

b.Cost of Goods Sold

c.Merchandise Inventory

d.Purchases

e.None of the above

5. What journal entry will bob record on may 3 if the periodic inventory system is used?

a.debit Accounts Payable, $1,000; credit Merchandise Inventory, $1,000.

b.debit Accounts Payable, $1,000; credit Purchases, $1,000.

c.debit Accounts Payable, $1,000; credit Purchase Discounts, $1,000.

d.debit Accounts Payable, $1,000; credit Purchase Returns and Allowances, $1,000.

e.debit Merchandise Inventory; $600; credit Cost of Goods Sold, $600.

6. What journal entry will bob record on may 3 if the PERPETUAL inventory system is used?

a.debit Accounts Payable, $1,000; credit Merchandise Inventory, $1,000.

b.debit Accounts Payable, $1,000; credit Purchases, $1,000.

c.debit Accounts Payable, $1,000; credit Purchase Discounts, $1,000.

d.debit Accounts Payable, $1,000; credit Purchase Returns and Allowances, $1,000.

e.debit Merchandise Inventory; $600; credit Cost of Goods Sold, $600.

7. What journal entry will sam record on may 3 if the periodic inventory system is used?

a.debit Merchandise Inventory, $600; credit Cost of Goods Sold, $600.

b.debit Sales, $1,000; credit Accounts Receivable, $1,000.

c.debit Sales, $1,000; credit Cash, $1,000.

d.debit Sales Returns and Allowances, $1,000; credit Accounts Receivable, $1,000.

e.debit Sales Returns and Allowances, $1,000; credit Cash, $1,000.

Answer & Explanation Solved by verified expert

See Answer