Perpetual Inventory System: Transactions and Closing Entries Danny's Wholesale Company

question 59

Essay

Perpetual inventory system: transactions and closing entries Danny's Wholesale Company uses a perpetual inventory system. A partial chart of accounts is shown below, followed by a series of merchandising transactions. Indicate the accounts that should be debited and credited in recording each transaction. (Ignore sales taxes.)
$$\begin{array} { | l | l | l | l | } \hline 1 & \text { Cash } & 50 & \text { Sales } \\\hline 2 & \text { Accounts Receivable } & 60 & \text { Cost of Goods Sold } \\\hline 5 & \text { Inventory } & 99 & \text { Income Summary } \\\hline 30 & \text { Accounts Payable } & & \\\hline 40 & \text { Retained Earnings } & & \\\hline\end{array}$$ $$\begin{array} { | l | l | l | l | } \hline & & \text { Account(s) } & \text { Account(s) } \\\hline & \text { Transactions } & \text { Debited } & \text { Credited } \\\hline & \text { Example: Sold merchandise for cash } & 1,60 & 50,5 \\\hline \text { A } & \text { Purchased merchandise on account } & & \\\hline \text { B } & \text { Sold merchandise on account } & & \\\hline \text { C } & \begin{array} { l } \text { Paid the supplier of the merchandise in transaction } \\\text { A }\end{array} & & \\\hline \text { D } & \text { Collected cash from the customer in transaction B } & & \\\hline \text { E } & \begin{array} { l } \text { The physical inventory at year-end disclosed a } \\\text { normal amount of inventory shrinkage }\end{array} & & \\\hline \text { F } & \text { Made an entry to close the Revenue account } & & \\\hline \text { G } & \begin{array} { l } \text { Made an entry at year-end to close the Cost of } \\\text { Goods Sold account }\end{array} & & \\\hline \text { H } & \begin{array} { l } \text { Closed the Income Summary account at the end of } \\\text { an unprofitable year }\end{array} & & \\\hline\end{array}$$

Learn the importance of avoiding hedging and being concise to strengthen statements.

Recognize how parallel construction enhances document coherence and readability.

Identify techniques for effective document structure and organization, including transitional elements.

Identify and understand the function of transformed predicates in sentences.

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Definitions:

Abyssal Plains

Very flat, deep-sea floors found at depths between 3,000 and 6,000 meters, making up a large portion of the ocean's basin.

Oceanic Fracture Zones

Linear oceanographic features caused by the movement of tectonic plates, characterized by significant variations in depth and topography.

Seafloor

The bottom of an ocean or sea, composed of various geological features including ridges, valleys, plains, and trenches, shaped by processes like volcanic activity, sediment deposition, and tectonic movements.

Mid-Ocean Ridges

Oceanic mountain chains that develop due to the movements of tectonic plates, leading to the formation of new sea floor as a result of volcanic eruptions.