It Is Important in Any Disciplinary System to Formally Record

question 39

Multiple Choice

It is important in any disciplinary system to formally record:

• A) What action was taken
• B) What the policy is
• C) When action was taken
• D) All of the choices are correct.

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Definitions:

Periodic Inventory System

An inventory system that updates inventory and cost of goods sold records at the end of an accounting period.

Gross Method

An accounting practice for recording inventory purchases without deducting any purchase discounts, which are recorded only if they are actually taken.

Terms 2/10, N/60

A trade credit term where a buyer can deduct 2% from the invoice amount if payment is made within 10 days; otherwise, the full invoice amount is due in 60 days.

Merchandise Inventory

An asset and perpetual inventory system account that records purchases of merchandise. Discounts and returns are recorded in this account for the buyer.