Part 1: Read Appendix 5A (Point 5 through Point 8 of the Chapter 5 Focus) Accounting for purchases and sales of merchandise under a periodic Inventory system: 1. True or False Under a periodic inventory system a company will continually update its inventory and cost of goods sold 2. When does a company update its cost of goods sold under a periodic inventory system? At the end of the period 3. Under a periodic inventory system how does a company determine the dollar amount of its ending inventory to include on its Balance Sheet? 4. Complete the following broad overview of the Cost of Goods Sold calculation under a periodic inventory system, Note: On Wednesday, September 30, 2020, we will study a detailed Cost of Goods Sold calculation under a periodic inventory system (Beginning, Ending) inventory $ XX + Cost of goods +XX Cost of Goods Available for Sale XX Less (Beginning, Ending) inventory XX) Cost of Goods Sold $. XX ssume a company uses the periodic inventory system to record its purchases and sales: 6. When the company records the purchase of merchandise for resale, it will debit the account 5. When the company pays the freight costs (also known as transportation costs) for merchandise it buys, it will debit the account. This account's normal account balance is a Another name for this account is This account will be Included in When the company pays the freight costs for merchandise itsells, it will debit the account Other names for this account are: This account is an on the seller's Income Statement. ACC 201 Chapter 5 Leaming Notes 2 Fall 2020 Page 2 Assume a company uses the periodic inventory system to record its purchases and sales: 8. When a company records a purchase return or a purchase allowance where the purchase was originally on credit, it will debit the account and credit the account 9. If a company pays the amount due within the discount period indicate below the accounts that the buyer will debit and credit in its journal entry to record the payment. Account debited: Accounts credited: and 11. What journal entry should a company make when it records a sales return or a sales allowance? 12. If a company receives payment from a customer within the sales discount period, indicate below the accounts that the seller will debit and credit in its journal entry to record the receipt Accounts debited and Account credited