FACTS ************************************************************************ January 1, Beginning Inventory: 700 units @ $10/unit June 30, Inventory Purchase (with cash): 1,000 units @ $10/unit September 30, Inventory Sale (on credit): 900 units @ $22/unit ************************************************************************

Additional Information: All purchases of inventory, throughout time, are $10/shirt, and therefore the inventory valuation method used by the company is irrelevant. The company only closes its books once a year, on December 31.

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Assuming the company uses the periodic method to account for its inventory, what journal entry will the company record on June 30?

Question 1 options:

	Dr. Purchases $10,000 Cr. Cash $10,000
	Dr. Inventory $10,000 Cr. Cash $10,000
	Dr. Purchases $10,000 Cr. Accounts Payable $10,000
	Dr. Inventory $10,000 Cr. Accounts Payable $10,000

Question 2 (2 points)

FACTS ************************************************************************ January 1, Beginning Inventory: 700 units @ $10/unit June 30, Inventory Purchase (with cash): 1,000 units @ $10/unit September 30, Inventory Sale (on credit): 900 units @ $22/unit ************************************************************************

Additional Information: All purchases of inventory, throughout time, are $10/shirt, and therefore the inventory valuation method used by the company is irrelevant. The company only closes its books once a year, on December 31.

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Assuming the company uses the periodic method to account for its inventory, what journal entry (or entries) will the company record on September 30?

Question 2 options:

	Two journal entries are required: Dr. Cash $19,800 Cr. Sales Revenue $19,800 Dr. CGS $900 Cr. Inventory $900
	Only one journal entry is required: Dr. Accounts Receivable $19,800 Cr. Sales Revenue $19,800
	Only one journal entry is required: Dr. Cash $19,800 Cr. Sales Revenue $19,800
	Two journal entries are required: Dr. Accounts Receivable $19,800 Cr. Sales Revenue $19,800 Dr. CGS $900 Cr. Inventory $900

Question 3 (2 points)

FACTS ************************************************************************ January 1, Beginning Inventory: 700 units @ $10/unit June 30, Inventory Purchase (with cash): 1,000 units @ $10/unit September 30, Inventory Sale (on credit): 900 units @ $22/unit ************************************************************************

Additional Information: All purchases of inventory, throughout time, are $10/shirt, and therefore the inventory valuation method used by the company is irrelevant. The company only closes its books once a year, on December 31.

_______________________

Assuming the company uses the periodic method to account for its inventory, what journal entry will the company record when it closes its books on December 31?

Question 3 options:

	No adjusting entry is required.
	Dr. Inventory (Beginning) $8,000 Dr. Purchases $9,000 Cr. Inventory (Ending) $7,000 Cr. CGS $10,000
	Dr. Inventory (Ending) $8,000 Dr. CGS $9,000 Cr. Inventory (Beginning) $7,000 Cr. Purchases $10,000
	Dr. Inventory (Beginning) $7,000 Dr. Purchases $10,000 Cr. Inventory (Ending) $8,000 Cr. CGS $9,000

Question 4 (2 points)

FACTS ************************************************************************ January 1, Beginning Inventory: 700 units @ $10/unit June 30, Inventory Purchase (with cash): 1,000 units @ $10/unit September 30, Inventory Sale (on credit): 900 units @ $22/unit ************************************************************************

Additional Information: All purchases of inventory, throughout time, are $10/shirt, and therefore the inventory valuation method used by the company is irrelevant. The company only closes its books once a year, on December 31.

_______________________

Assuming the company uses the perpetual method to account for its inventory, what journal entry will the company record on June 30?

Question 4 options:

	Dr. Inventory $10,000 Cr. Cash $10,000
	Dr. Inventory $10,000 Cr. Accounts Payable $10,000
	Dr. Purchases $10,000 Cr. Cash $10,000
	Dr. Purchases $10,000 Cr. Accounts Payable $10,000