PAIL ASSIGNMENT- Chapter 5 Explain the primary difference between the perpetual inventory system and the periodic inventory system and the potential benefits of a perpetual inventory system. 1. Explain the income measurement process in a merchandising company. How does income measurement differ between a merchandising company and a service company? 2. A credit sale is made on July 10 for $900, terms 1/15, n/30. On July 12, the purchaser returns $100 of goods for credit. Give the journal entry on July 19 to record the receipt of the balance due within the discount period. 3. Scribe Company reports net sales of $800,000, gross profit of $560,000, and net income of $230,000. What are its operating expenses? 4. Why is the normal operating cycle for a merchandising company likely to be longer than for a service company? 5. 6. What types of businesses are most likely to use a perpetual inventory system