On April 1, Moloney Meat Distributors sold merchandise on account to Fronke's Franks for $3,500...
Question:
On April 1, Moloney Meat Distributors sold merchandise on account to Fronke's Franks for $3,500 on Invoice 1001, terms 2/10, n/30.The cost of merchandise sold was $2,120 Payment was received in full from Fronke's Franks, less discount, on April 10.
Record the transactions on April 1 and April 10. The company uses the perpetual inventory system.
Perpetual Inventory:
The perpetual inventory system involves reconciling purchases and sales with inventory as they occur. The perpetual system of inventory is used over the periodic inventory system that, while simpler, can provide less control over inventory accounts.
Answer and Explanation: 1
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View this answerWe begin by recording the sale on April 1st:
| Date | Account | Debit | Credit |
|---|---|---|---|
| 4/1 | Accounts Receivable | $3,500 | |
| Service Revenue | $3,500 | ||
| Note: | To record accrual of... |
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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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