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Inventory Systems, Increases, Inclusion Count & Vendor Discounts

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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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 ...

Solution Summary

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