(L. OBJ. 1) Comparing periodic and perpetual inventory systems [10 min]
You may have shopped at a Ronny’s store. Suppose Ronny’s purchased T-shirts on account for $18,130. Credit terms are 3/15, n/45. Ronny’s paid within the discount period.
Requirements
1. IF Ronny’s Lises a periodic inventory system, when will the purchase of inventory be recorded as an expense—when it is purchased or when it is sold?
2. If Ronny’s uses the perpetual inventory system, when will the purchase of inventory be recorded as an expense—when it is purchased or when it is sold?
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