Question 6

The Alchemist Store supplies books to the public. The following transactions took place during the month of October 2021:

14 October: Sold goods on account to Walids Book Store for $3,600, terms 2/10, n/30. The cost of goods sold was $2,800.

16 October: The business forwarded a credit note for $280 to Walids Book Store covering part of the goods sold on 14 October, which cost $250, and were returned by Walids Book Store as a wrong title.

22 October: The Alchemist Store received a cheque from Walids Book Store in full settlement for the above transactions.

Required:

a) Using the perpetual inventory system, record the above transactions in the general journal of The Alchemist Store. Narrations are not required. (11 marks)

b) Discuss the advantage of a perpetual inventory system over the periodic inventory system (2 marks)

answer template

part a)

The Alchemist Store General Journal
	Particulars	Dr	Cr