# Accounting 6

Inventory shortage is recorded when
there is a difference between a physical count of inventory and inventory records.
The cost of merchandise inventory is limited to the purchase price less any purchase discounts.
False
Which one of the following is not a difference between a retail business and a service business?
accounting equation
In the periodic inventory system, purchases of merchandise for resale are debited to the Purchases account.
True
A sale of \$750 on account, subject to a sales tax of 6%, would be recorded as an account receivable of \$750.
False
Dorman Co. sold merchandise to Smith Co. on account, \$23,500, terms 2/15, net 45. The cost of the merchandise sold is \$16,000. Dorman Co. issued a credit memo for \$1,750 for merchandise returned that originally cost \$1,400. The Smith Co. paid the invoice within the discount period. What is amount of net sales from the above transactions?
\$21,315
Taking advantage of a 2/10, n/30 purchases discount is equal to a savings yearly rate of approximately
36%
Using the following information, what is the amount of net sales?
\$62,090
A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, \$3,600; Freight-In, \$650; Purchases, \$10,700; Purchases Returns and Allowances, \$1,950; Purchases Discounts, \$330. The cost of merchandise purchased is equal to
\$9,070
If the physical count of the inventory revealed \$158,000 of merchandise on hand and the inventory records reported \$163,000, what would be the necessary adjusting entry to record inventory shortage?
Cost of Merchandise Sold debit \$5,000; Merchandise Inventory credit \$5,000.

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