Use the following information toanswer the next 11 questions. SELECT ALL ANSWERS THATAPPLY.
On May I. Sam Company sold $5,000of inventory to Bob Company. The sale was made on account and Samgranted Bob credit terms of 2/10. n/30. The inventory cost SamCompany $3,000. On May 3, Bob returned $1,000 of the inventory toSam. (The inventory returned by Bob cost Sam $600.) On May 9, Bobpaid Sam in full for the amount due.
1. What account will Bob debit on May I if the periodicinventory system is used?
A) Accounts Payable
B) Cost of Goods Sold
c) Merchandise Inventory
D) Purchases
E) None of the above
2. What account will Bob debit on May I if the perpetualinventory system is used?
A) Accounts Payable
B) Cost of Goods Sold
C) Merchandise Inventory
D) Purchases
E) None of the above
3. What account will Sam debit on May l if the periodicinventory system, is used?
A) Accounts Payable
B) Cost of Goods Sold
C) Merchandise Inventory
D) Purchases
E) None of the above
4. What account will Sam debit on May I if the perpetualinventory system is used?
A) Accounts Payable
B) Cost of Goods Sold
C) Merchandise Inventory
D) Purchases
E) None of the above
5. What journal entry will Bob record on May 3 if the periodicinventory system is used?
A) debit Accounts Payable, $1,000; credit Merchandise Inventory,$1,000.
B) debit Accounts Payable, $1,000; credit Purchases, $1,000.
C) debit Accounts Payable, $1,000; credit Purchase Discounts,$1,000.
D) debit Accounts Payable, $1,000; credit Purchase Returns andAllowances, $1,000.
E) debit Merchandise Inventory; $600; credit Cost of Goods Sold,$600.
6. what journal entry will Bob record on May 3 if the perpetualinventory system is used?
A) debit Accounts Payable, $1,000; credit Merchandise Inventory,$1,000.
B) debit Accounts Payable, $1,000; credit Purchases, $1,000.
C) debit Accounts Payable, $1,000; credit Purchase Discounts,$1,000.
D) debit Accounts Payable, $1,000; credit Purchase returns andAllowances, $1,000.
E) debit Merchandise Inventory; $600; credit Cost of Goods Sold,$600.
7. what journal entry will Sam record on May 3 if the periodicinventory system is used?
A) debit Merchandise Inventory, $600; credit Cost of Goods Sold,$600.
B) debit Sales, $1,000; credit Accounts Receivable, $1,000.
C) debit Sales, $1,000; credit Cash, $1,000.
D) debit Sales Returns and Allowances, $1,000; credit AccountsReceivable, $1,000.
E) debit Sales Returns and Allowances, $1,000; credit Cash,$1,000.
