Question

In: Accounting

Which inventory system is continually updated? If the buyer doesn't pay in time for the discount,...

  1. Which inventory system is continually updated?
  2. If the buyer doesn't pay in time for the discount, what happens to inventory?
  3. Which account is credited in a return?
  4. Payments using major credit cards are considered what?
  5. If the customer misses the discount period, what happens to Sales?
  6. Who pays in FOB destination?

Solutions

Expert Solution

Solution:

Which inventory system is continually updated?
Answer: Such Inventory system is called perpetual inventory System
If the buyer doesn't pay in time for the discount, what happens to inventory?
Answer: In a perpetual Inventory system, the inventory is credited for any discounts received. When the discount is taken by the buyer, then there is no change in the inventory value.
Which account is credited in a return?
Answer: In perpetual Inventory System, Inventory account is credited for a purchase return. For Sales Return Cost of Goods sold is credited.
If the customer misses the discount period, what happens to Sales?
Answer: Sales amount remains the same. When a discount is taken by the customer, the sales is adjusted for the discount taken.
Who pays in FOB destination?
Answer: The Seller pays for FOB destination

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ekkarill92 answered 3 years ago
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