In Discussion Forum 3, post your response to the following

discussion assignment. Reply to at least two classmates' responses by the date

indicated in the Course Calendar.

In each of the following situations, indicate whether you

would expect the business to use a periodic inventory system or a perpetual

inventory system. Explain the reasons for your answer.

The Frontier Shop is a small retail store that sells boots

and Western clothing. The store is operated by the owner, who works full-time

in the business, and by one part-time sales clerk. Sales transactions are

recorded on an antique cash register. The business uses a manual accounting

system, which is maintained by ACE Bookkeeping Service. At the end of each

month, an employee of ACE visits the Frontier Shop to update its accounting

records, prepare sales tax returns, and perform other necessary accounting

services.

Allisters Corner is an art gallery in the Soho district of

New York. All accounting records are maintained manually by the owner, who

works in the store on a full-time basis. The store sells three or four

paintings each week, at sales prices ranging from about $5,000 to $50,000 per

painting.

A publicly owned corporation publishes about 200 titles of

college-level textbooks. The books are sold to college bookstores throughout

the country. Books are distributed to these bookstores from four central

warehouses located in California, Texas, Ohio, and Virginia.

Toys-4-You operates a national chain of 86 retail toy

stores. The company has a state-of-the-art computerized accounting system. All

sales transactions are recorded on electronic point-of-sale terminals. These

terminals are tied into a central computer system that provides the national

headquarters with information about the profitability of each store on a weekly

basis.

Mr. Jingles is an independently owned and operated ice cream

truck.

TransComm is a small company that sells very large

quantities of a single product. The product is a low-cost spindle of recordable

compact disks (CDRs) manufactured by a large Japanese company. Sales are made

only in large quantities, primarily to chains of computer stores and large

discount stores. This year, the average sales transaction amounted to $14,206

of merchandise. All accounting records are maintained by a full-time employee

using commercial accounting software and a personal computer.