Asked by Duval Demps on May 23, 2024
Verified
On May 1,Anders Company purchased merchandise in the amount of $5,800 from Shilling,with credit terms of 2/10,n/30.Anders uses the perpetual inventory system and the gross method.The journal entry that Anders will make on May 1 is:
A) 
B) 
C) 
D) 
E) 
Perpetual Inventory System
A method of accounting for inventory where transactions are recorded in real-time, allowing for continuous tracking of inventory levels.
Gross Method
An accounting approach where discounts for early payment are not considered until they are actually taken by the customer.
Merchandise
Goods that are purchased for resale to customers in the normal course of business operations.
- Acquire knowledge of the core principles and operational aspects of the perpetual inventory system, with an emphasis on making journal entries for procurement, returns, and payments.
Verified Answer
JB
Jeremy BernardMay 28, 2024
Final Answer :
B
Explanation :
The journal entry to record the purchase of merchandise under the perpetual inventory system and the gross method is to debit Merchandise Inventory for the cost of goods purchased ($5,800) and credit Accounts Payable for the same amount. The discount is not taken at this time, but instead recorded if payment is made within the discount period. Therefore, the correct journal entry is: Merchandise Inventory $5,800, Accounts Payable $5,800. This matches with option B.
Learning Objectives
- Acquire knowledge of the core principles and operational aspects of the perpetual inventory system, with an emphasis on making journal entries for procurement, returns, and payments.