Shankar Company uses a perpetual system to record inventory transactions. The company purchases...
Question:
Shankar Company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 2, 2012, for $40,000 and then sells this inventory on account on March 17, 2012, for $62,000. Record transactions for the purchase and sale of inventory.
Perpetual Inventory System:
Perpetual Inventory System is a method of recording the transactions affecting inventory during the period. This system maintains a record of the inventory balances up-to-date which helps in determining when to purchase additional inventory.
Answer and Explanation: 1
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View this answer| Date | Accounts | Debit | Credit |
|---|---|---|---|
| Feb 2, 2012 | Inventory | 40,000 | |
| Accounts Payable | 40,000 | ||
| Mar 17, 2012 | Accounts Receivable | 62,000 | |
| Sales | 62,000 | ||
| Cost... |
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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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