Asked by Larry Dowling on Apr 24, 2024
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Merchandise with a list price of $4,700 is purchased on account, terms FOB shipping point, 1/10, n/30. The seller prepaid freight costs of $100. Prior to payment, $1,600 of the merchandise is returned. The invoice is paid within the discount period.Record the foregoing transactions of the buyer in the sequence indicated below, assuming a perpetual inventory system is used.(a)Purchased the merchandise.(b)Recorded receipt of the credit memo for merchandise returned.(c)Paid the amount owed.
FOB Shipping Point
A term used in shipping contracts to indicate that the buyer is responsible for the goods and the shipping cost from the moment the goods leave the seller's premises.
Perpetual Inventory System
This method for accounting inventory immediately notes down any purchase or sale through the use of computerized point-of-sale systems and enterprise asset management software.
- Understand thoroughly and apply the mechanics of the perpetual inventory system in transaction records.
- Understand and apply terms of sales, including FOB shipping point and FOB destination.
Verified Answer
Learning Objectives
- Understand thoroughly and apply the mechanics of the perpetual inventory system in transaction records.
- Understand and apply terms of sales, including FOB shipping point and FOB destination.
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