In a Perpetual Inventory System

question 78

Multiple Choice

In a perpetual inventory system

• A) The sales journal tracks sales discounts taken
• B) The cash receipts journal tracks sales returns and allowances taken
• C) The cash disbursements journal tracks purchase discounts taken
• D) The purchase journal tracks merchandise inventory bought
• E) The sales journal tracks increase in inventory

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Definitions:

Withholding Allowance

A determination used to calculate the amount of federal income tax to withhold from an employee's paycheck.

Gross Earnings

The total amount of money earned by an individual or a company before any deductions or taxes are applied.

Taxable Income

The amount of an individual's or a corporation's income used to determine how much tax is owed to the government.

Withholding Allowance

A tax term referring to an exemption that reduces how much income tax an employer deducts from an employee's paycheck.