Question 1

Logan Company made a purchase of merchandise on credit from Claude Corporation on August 3, for $6,000, terms 2/10, n/45. On August 10, Logan makes the appropriate payment to Claude. Logan uses a perpetual inventory system. The entry on August 10 for Logan Company is

Accounts Payable

5,880

Cash

5,880

Accounts Payable

6,000

Cash

6,000

Accounts Payable

6,000

	Cash		5,880
	Merchandise Inventory		120

Accounts Payable

6,000

	Cash		5,880
	Purchases Returns		120

3 points

Question 2

Flynn Company purchased merchandise inventory with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Flynn Company pays within the discount period?

		$4,500
		$4,900
		$5,000
		$4,600

3 points

Question 3

Which of the following is a true statement about inventory systems?

		A periodic system requires cost of goods sold be determined after each sale.
		A perpetual system determines cost of goods sold only at the end of the accounting period.
		Perpetual inventory systems require more detailed inventory records.
		Periodic inventory systems require more detailed inventory records.