Asked by Casual Commentator on Jun 12, 2024
Verified
Based on the information below, journalize the entries for the seller and the buyer. Both use a perpetual inventory system.(a)Seller sold merchandise on account to the buyer, $4,750, terms 2/10, net 30, FOB shipping point. The cost of the merchandise is $2,850. The seller prepays the freight of $75.(b)Buyer returns $700 of merchandise as defective. The cost of the merchandise is $420.(c)Buyer pays within the discount period. 
FOB Shipping Point
A term used in shipping agreements indicating that the buyer assumes responsibility and ownership of goods once they leave the seller's premises.
Perpetual Inventory System
An accounting method that continuously updates inventory records for every purchase and sale.
Credit Memo
A document issued by a seller to a buyer, reducing the amount that the buyer owes due to a return or refund.
- Grasp the functionality of and execute the perpetual inventory system in transaction management.
- Log the activities associated with procurement and financial settlements, noting the influence of discounts.
Verified Answer
DA
(b)(c) 
Learning Objectives
- Grasp the functionality of and execute the perpetual inventory system in transaction management.
- Log the activities associated with procurement and financial settlements, noting the influence of discounts.