Front

What is a perpetual inventory system?

Back

A perpetual inventory system is a method of tracking inventory that updates records in real-time with each transaction.

Front

How does a perpetual inventory system differ from a periodic inventory system?

Back

A perpetual inventory system updates inventory records continuously, while a periodic system updates them at specific intervals.

Front

Which of the following is a benefit of using a perpetual inventory system? It reduces the need for real-time data., It eliminates the need for inventory management software., It provides accurate inventory levels at any given time., It requires less initial setup compared to other systems.

Back

It provides accurate inventory levels at any given time.

Front

What type of balance sheet account is "Sales Returns and Allowances"?

Back

Contra [revenue] account

Front

When giving someone store credit, how would you journal this?

Back

Debit Sales Returns and Allowance, Credit AP

Front

What is the primary purpose of a contra revenue account like "Sales Returns and Allowances"?

Back

To offset sales revenue and reflect returns or allowances

Front

Which of the following transactions would require a journal entry in a perpetual inventory system? Monthly inventory count, Sale of merchandise, Annual financial audit, Employee salary payment

Back

Sale of merchandise

Front

How does a store credit affect the financial statements of a business?

Back

Increases liabilities

Front

When purchasing an asset on account, what are my debits and credits? Options: Debit Accounts Receivable, Credit Inventory, Debit Purchases, Credit Accounts Payable, Debit Accounts Payable, Credit Sales Revenue, Debit Cash, Credit Inventory

Back

Debit Purchases, Credit Accounts Payable

Front

What is the impact of a perpetual inventory system on financial reporting?

Back

It provides more accurate and timely financial information by continuously updating inventory records.