Problem: ABC Company sold merchandise to XYZ Company on 10/31/15 FOB destination, terms 2/10, n/30. ABC uses a periodic inventory system and XYZ uses a perpetual inventory system. The goods were shipped 10/31 and received by XYZ on 11/1. What entry is required on ABC’s books on 11/1? a. Debit: COGS and Credit: Inventory b. Debit: Accounts receivable and Credit: Sales c. Debit: Purchases and Credit: Accounts Payable d. Debit: Inventory and Credit: Accounts Payable

FREE Expert Solution
Problem Details

ABC Company sold merchandise to XYZ Company on 10/31/15 FOB destination, terms 2/10, n/30. ABC uses a periodic inventory system and XYZ uses a perpetual inventory system. The goods were shipped 10/31 and received by XYZ on 11/1. What entry is required on ABC’s books on 11/1?

a. Debit: COGS and Credit: Inventory

b. Debit: Accounts receivable and Credit: Sales

c. Debit: Purchases and Credit: Accounts Payable

d. Debit: Inventory and Credit: Accounts Payable

Frequently Asked Questions

What scientific concept do you need to know in order to solve this problem?

Our tutors have indicated that to solve this problem you will need to apply the Periodic Inventory - FIFO, LIFO, and Average Cost concept. You can view video lessons to learn Periodic Inventory - FIFO, LIFO, and Average Cost. Or if you need more Periodic Inventory - FIFO, LIFO, and Average Cost practice, you can also practice Periodic Inventory - FIFO, LIFO, and Average Cost practice problems.

What is the difficulty of this problem?

Our tutors rated the difficulty ofABC Company sold merchandise to XYZ Company on 10/31/15 FOB ...as low difficulty.