A seller uses a perpetual inventory system, and on April 4, it sells $5,000 in merchandise (its...
Question:
A seller uses a perpetual inventory system, and on April 4, it sells $5,000 in merchandise (its cost is $2,400) to a customer on credit terms of 3/10, n/30.
Prepare two journal entries to record the sales transaction. The first journal entry is to record the revenue part of the transaction and the second journal entry is to record the cost part.
Perpetual Inventory:
Most of the companies now a days uses perpetual inventory valuation technique because it provides a real time data about inventory. This is because the inventory is updated after every sale and purchase transaction.
Answer and Explanation: 1
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View this answer| Date | Particulars | Debit | Credit |
|---|---|---|---|
| Apr. 4 | Accounts receivable | 5,000 | |
| Sales revenue | 5,000 | ||
| Apr. 4 | Cost of goods sold | 2,400 | |
| Merchandise inventory | 2,400 |
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Perpetual Inventory System: Definition, Advantages & Examples
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Chapter 1 / Lesson 15
50K
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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