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Inventory Systems, Increases, Inclusion Count & Vendor Discounts

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7. Detailed records of movements in merchandise (each purchase and sale) are not maintained in the inventory account in a

A. perpetual inventory system.
B. periodic inventory system.
C. double entry accounting system.
D. business that sells expensive merchandise.

8. Hunter Company purchased merchandise inventory with an invoice price of $12,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Hunter Company pays within the discount period?

A. $11,040
B. $10,800
C. $11,760
D. $12,000

9. Jake's Market recorded the following events involving a recent purchase of merchandise:
Received goods for $20,000, terms 2/10, n/30.
Returned $400 of the shipment for credit.
Paid $100 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company's merchandise inventory

A. increased by $19,208.
B. increased by $19,700.
C. increased by $19,306.
D. increased by $19,308.

10. The factor which determines whether or not goods should be included in a physical count of inventory is

A. physical possession.
B. legal title.
C. management's judgment.
D. whether or not the purchase price has been paid.

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Solution Summary

The solution discusses inventory systems, inventory increases, inventory inclusion count and vendor discounts.

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Question No Selected Correct Answer Remarks
7 B. periodic inventory system. Unlike perpetual inventory system Day to day purchase and sales not recorded in inventory account in periodic system and ...

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