A company purchases merchandise for $1,500 on account. Later, they return defective goods with a purchase price of $200. Under a perpetual system, the journal entry to record the return is:
Explanation
This question assesses the correct journal entry for a purchase return under the perpetual inventory system.
Other questions
What are the two main categories of expenses for a merchandising company?
Under a perpetual inventory system, the entry to record a credit purchase of merchandise includes a debit to which account?
Sauk Stereo purchased merchandise from PW Audio Supply for $3,800 on account. The freight terms were FOB shipping point, and Sauk Stereo paid the carrier $150. What is the journal entry for Sauk Stereo to record the payment of the freight charges?
A company purchases merchandise for $5,000 on terms 2/10, n/30. If the company pays the invoice within the discount period, what is the amount of the cash payment?
When a seller records a credit sale of merchandise for $3,800 that cost $2,400 under a perpetual inventory system, how many journal entries are made and what is the effect on the Inventory account?
What is the purpose of the Sales Returns and Allowances account?
How is Gross Profit calculated on a multiple-step income statement?
Which of these accounts would be closed to Income Summary with a debit?
A key difference between the periodic and perpetual inventory systems is that the periodic system:
A single-step income statement is characterized by:
PW Audio Supply, Inc. has an unadjusted balance of $40,500 in its Inventory account. A physical count reveals the actual merchandise inventory at year-end is $40,000. What is the required adjusting entry?
What is the formula to calculate the cost of goods sold under a periodic system?
Celine’s Sports Wear Shop has Sales Revenue of $162,400 and Rent Revenue of $6,000. It also has Sales Returns and Allowances of $4,800 and Sales Discounts of $3,600. What is Celine's net sales?
A comprehensive income statement is designed to show:
Under the periodic inventory system, the journal entry to record the return of defective merchandise purchased on account is:
Which inventory system provides a more up-to-date, or continuous, record of the inventory that should be on hand?
If a sales invoice indicates credit terms of 1/10 EOM, what does this mean?
A company sells merchandise for $800 on a credit card. The credit card company charges a 3 percent service fee. The entry to record this sale would include a:
Which of the following is considered a nonoperating activity on a multiple-step income statement?
If a company has beginning inventory of $50,000, cost of goods purchased of $380,000, and ending inventory of $60,000, what is its cost of goods sold?
If freight terms are FOB destination, who is responsible for paying the freight costs?
A buyer returns damaged goods to a seller. Under a perpetual inventory system, the seller's entry to record the return includes a debit to:
If a company's net sales are $500,000, cost of goods sold is $300,000, and operating expenses are $120,000, what is its gross profit rate?
In a periodic inventory system, the Freight-In account is used to record:
When closing entries are prepared for a merchandising company, which account is NOT closed to Income Summary?
The operating cycle of a merchandising company is typically:
A company that uses a periodic inventory system takes a physical inventory count for two primary purposes:
What does the term '2/10, n/30' mean?
Which of the following items is included in the 'Other revenues and gains' section of a multiple-step income statement?
If net sales are $400,000, cost of goods sold is $310,000, and operating expenses are $60,000, what is the gross profit?
Which account is NOT used in a perpetual inventory system?
When a company grants a customer an allowance for damaged merchandise, which of the following entries is made by the seller under a perpetual system?
If a company's gross profit is $200,000 and its net sales are $500,000, what is its cost of goods sold?
What is the purpose of a comprehensive income statement?
In a perpetual inventory system, a credit to the Inventory account could be caused by:
A company sells goods for $2,000 on terms 3/10, n/30. The customer returns goods with a selling price of $400 and then pays the remaining balance within the discount period. How much cash does the company receive?
On a multiple-step income statement, Income from Operations is calculated as:
Under the periodic inventory system, the Purchase Discounts account has a normal:
Which of the following would NOT be considered an operating expense for a merchandising company?
A company has beginning inventory of $10,000, purchases of $150,000, and freight-in of $5,000. What is the cost of goods available for sale?
In a perpetual system, the entry to record a sales discount is:
The income measurement process for a merchandising company, as shown in Illustration 5-1, involves which of the following subtotals not found in a service company's income statement?
If a company using a periodic system purchases merchandise for $2,000 on account with credit terms of 2/10, n/30 and pays the invoice within 10 days, what is the journal entry for the payment?
Which of the following is a primary reason a company would choose a perpetual inventory system over a periodic system?
A buyer returns merchandise worth $300 to a seller. The cost of the merchandise to the seller was $140. What is the seller's second journal entry to record this return under a perpetual system, assuming the goods are not defective?
If a company's sales revenue is $480,000 and it has a gross profit rate of 30 percent, what is the amount of its gross profit?
Which of these accounts would be found on the income statement of a merchandising company but NOT a service company?
In a periodic system, the 'Cost of Goods Purchased' is calculated as:
The single-step income statement format is favored by some because: