Financial Accounting Chapter 5 Quiz

Under the periodic inventory system, closing entries will include
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Madison Company's perpetual inventory records indicate that $542,280 of merchandise should be on hand on October 31. The physical inventory count indicates that $499,400 is actually on hand.
Journalize the adjusting entry for the inventory shrinkage for Madison Company for the year ended October 31. If an amount box does not require an entry, leave it blank.
When goods are shipped FOB destination and the seller pays the freight charges, the buyermakes no journal entry for the freightA company using the periodic inventory system has inventory costing $174 on hand at the beginning of a period. During the period, merchandise costing $627 is purchased. At year-end, inventory costing $348 is on hand. The cost of goods sold for the year is$453The primary difference between the periodic and perpetual inventory systems is that aperiodic system keeps a record showing the inventory on hand at all timesUnder the perpetual inventory system, all purchases of merchandise are debited toInventoryExpenses that are incurred directly or entirely in connection with the selling of merchandise are classified asselling expensesInventory is classified on the balance sheet as acurrent assetMerchandise subject to terms 2/10, n/30, FOB shipping point, is sold on account to a customer for $16,600. What is the amount of sales discount allowable?332Pierce Company sold merchandise on account to Stanton Company, terms FOB shipping point, n/ 30, for $22,000. Pierce prepaid the $300 shipping charge. Which of the following entries does Pierce make to journalize this sale?debit Accounts Receivable—Stanton Company for $22,000; credit Sales for $22,000 and debit Accounts Receivable—Stanton Company for $300; credit Cash for $300The arrangements between buyer and seller as to when payments for merchandise are to be made are calledcredit termsIf title to merchandise purchases passes to the buyer when the goods are delivered to the buyer, the terms areFOB shipping point