A Company Uses a Perpetual System to Record Inventory Transactions

question 1

Essay

A company uses a perpetual system to record inventory transactions.The company purchases inventory on account on February 9,2012,for $50,000 and then sells this inventory on account on March 7,2012,for $70,000.Record the transactions for the purchase and sale of the inventory.

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Definitions:

Shareholder

An individual or entity that owns shares in a corporation, making them a part owner of the company.

Finance

The study and management of money, investments, and other financial instruments, including the processes of raising, allocating, and utilizing funds by individuals, businesses, and governments.

Historically

Referring to events, conditions, or patterns that have occurred in the past.

Securities

Securities are financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a government or corporation (bond), or rights to ownership as represented by an option.