Reference no: EM133051544

Question - The big pen store supplies pens to the public. The following transactions took place during the month of May 2021:

14 May: Sold goods on account to Susie's pen store for $3,600, terms 2/10, n/30. The cost of goods sold was $2,800.

16 May: The business forwarded a credit note for $280 to Susie's pen store covering part of the goods sold on 14 May which cost $250, and were returned by Susie's pen store as a wrong title.

22 May: The big pen store received a cheque from Susie's pen store in full settlement for the above transactions.

Required -

1. Using the perpetual inventory system, record the above transactions in the general journal of The big pen store. Narrations are not required.

2. Discuss the advantage of a perpetual inventory system over the periodic inventory system.