When the perpetual inventory system is used, the inventory sold is shown on the income statement as

If the physical count of the inventory revealed $158,000 of merchandise on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shrinkage?
Question options:

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When inventory is sold in a perpetual inventory system?
When using the perpetual inventory method when is cost of goods sold recorded?
When an item is sold using the perpetual accounting system What is the entry to the inventory account credit or debit?
How is inventory recorded in a perpetual inventory system?

1)
debit Merchandise Inventory, $5,000; credit Cost of Merchandise Sold, $5,000

2)
debit Cost of Merchandise Sold, $5,000; credit Merchandise Inventory, $5,000

3)
debit Merchandise Inventory, $158,000; credit Cost of Merchandise Sold, $158,000

4)
debit Cost of Merchandise Sold, $163,000; credit Merchandise Inventory, $158,000

The Corbit Corp. sold merchandise for $10,000 cash. The cost of the merchandise sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be

1)
Cash 10,000
Merchandise Inventory 10,000

Cost of Merchandise Sold 7,590

Sales 7,590

2)
Cash 10,000
Sales 10,000

Cost of Merchandise Sold 10,000

Merchandise Inventory 10,000

3)
Cash 10,000
Sales 10,000

Cost of Merchandise Sold 7,590

Merchandise Inventory 7,590

4)
Cash 7,590
Sales 7,590

Cost of Merchandise Sold 7,590

Merchandise Inventory 7,590

Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of the merchandise sold is $24,500. Abbey Co. issued a credit memo for $3,600 for merchandise returned that originally cost $1,700. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?
Question options:

1)
$30,772

2)
$10,500

3)
$31,400

4)
$7,972

Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge. Which of the following entries does Pierce make to record this sale?
Question options:

1)
Accounts Receivable—Stanton, debit $20,000; Sales, credit $20,000, and
Delivery Expense, debit $500; Cash, credit $500

2)
Accounts Receivable—Stanton, debit $20,100; Sales, credit $20,100

3)
Accounts Receivable—Stanton, debit $20,000; Sales, credit $20,000

4)
Accounts Receivable—Stanton, debit $19,600; Sales, credit $19,600, and
Accounts Receivable—Stanton, debit $500; Cash, credit $500

Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry(ies) would be recorded?
Question options:

1)
debit Cash, $1,250; credit Sales, $1,250

2)
debit Cash, $2,000; credit Sales, $2,000; and debit Cost of Merchandise Sold, $1,250; credit Merchandise Inventory, $1,250

3)
debit Accounts Receivable, $2,000; credit Sales, $2,000; and debit Cost of Merchandise Sold, $1,250; credit Merchandise Inventory, $1,250

4)
debit Cash, $2,000; credit Merchandise Inventory, $1,250

Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 2/10, net 30, for $15,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record payment of the merchandise if Isabella Co. pays within the discount period?
1)
Accounts Payable—Emma Co., debit $15,750; Merchandise Inventory, debit $300; Cash, credit $16,050

2)
Accounts Payable—Emma Co., debit $15,000; Freight In, debit $750; Cash, credit $15,750

3)
Accounts Payable—Emma Co., debit $15,000; Cash, credit $15,000

4)
Accounts Payable—Emma Co., debit $15,450; Cash, credit $15,450

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. The effect on the balance sheet and income statement would be
Question options:

1)
assets overstated by $70,000; retained earnings understated by $70,000; and no effect on the income statement

2)
assets and retained earnings overstated by $70,000; and net income understated by $70,000

3)
assets overstated by $70,000; retained earnings understated by $70,000; and net income statement understated by $70,000

4)
assets, retained earnings, and net income all overstated by $70,000

Merchandise inventory at the end of the year was inadvertently overstated. Which of the following statements correctly states the effect of the error on net income, assets, and owner's equity?
Question options:

1)
net income is understated, assets are understated, and owner's equity is overstated

2)
net income is understated, assets are understated, and owner's equity is understated

3)
net income is overstated, assets are overstated, and owner's equity is overstated

4)
net income is overstated, assets are overstated, and owner's equity is understated

When inventory is sold in a perpetual inventory system?

Under a perpetual system, two journal entries are recorded when a product is sold: The sale amount is debited to Accounts Receivable or Cash and is credited to Sales. The cost of merchandise sold is debited to the cost of goods sold (COGS) account and credited to Inventory.

When using the perpetual inventory method when is cost of goods sold recorded?

Under the perpetual system, two transactions are recorded at the time that the merchandise is sold: (1) the amount of the sale is debited to Accounts Receivable or Cash and is credited to Sales, and (2) the cost of the merchandise sold is debited to the account Cost of Goods Sold and is credited to Inventory.

When an item is sold using the perpetual accounting system What is the entry to the inventory account credit or debit?

Journal Entries for Merchandise Purchaser (Perpetual Method) As inventory is sold, the Merchandise Inventory account is credited, and Cost of Goods Sold is debited for the cost of the inventory sold. One of the features of the perpetual system is to provide the firm with information concerning its inventory levels.

How is inventory recorded in a perpetual inventory system?

In a perpetual inventory system, software records changes into a sales revenue account each time the company makes a sale or purchases new inventory. This process of recording sales ensures that the accounting records reflect accurate balances in the accounts affected. The software also records the price charged.