Asked by Jasdeep Singh on May 12, 2024
Verified
Which of the following accounts would be included in the chart of accounts of a merchandising company using the (a) periodic inventory system, (b) perpetual inventory system, or (c) both systems?
(1) Purchases
(2) Inventory
(3) Sales
(4) Purchases Discounts
(5) Cost of Goods Sold
(6) Freight In
(7) Delivery Expense
Perpetual Inventory System
An accounting method that records the sale or purchase of inventory immediately through computerized point-of-sale systems and Enterprise Resource Planning systems.
Periodic Inventory System
An inventory accounting system where updates to inventory levels are made at specific intervals, rather than continuously.
Purchases Discounts
Purchases discounts are reductions in price given by suppliers to buyers for early payment of invoices.
- Understand the importance and role of a chart of accounts in financial reporting.
Verified Answer
RV
Learning Objectives
- Understand the importance and role of a chart of accounts in financial reporting.