Bayer Company Uses the Periodic Inventory System

question 112

Multiple Choice

Bayer Company uses the periodic inventory system.Bayer Company sold goods on account with a retail price of $1,000 and a cost of $500.What journal entry(ies) is(are) prepared?

• A)debit Accounts Receivable for $1,000 and credit Sales Revenue for $1,000
• B)debit Accounts Receivable for $500 and credit Sales Revenue for $500
• C)debit Accounts Receivable for $1,000 and credit Sales Revenue for $1,000, debit Cost of Goods Sold for $500 and credit Inventory for $500.
• D)debit Inventory for $500 and credit Purchases for $500

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed; the government sets these rates to collect revenues.

UCC

The Uniform Commercial Code (UCC) is a comprehensive set of laws governing commercial transactions in the United States, including sales, leases, negotiable instruments, and secured transactions.

Net After-Tax Salvage Value

The estimated resale value of an asset at the end of its useful life, minus any removal or disposal costs, and adjusted for taxes.

Recapture

A tax provision where previously deducted or credited amounts are added back to income.