Cost of goods sold is determined only at the end of the accounting period in a perpetual inventory system. a periodic inventory system. both a perpetual and a periodic inventory system. neither a perpetual nor a periodic inventory system.

Cost of goods sold is determined only at the end of the accounting period in a perpetual inventory system. a periodic inventory system. both a perpetual and a periodic inventory system. neither a perpetual nor a periodic inventory system.

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Description: Cost of goods sold is determined only at the end of the accounting period ina perpetual inventory system.a periodic inventory system.both a perpetual and a periodic inventory system.● neither a perpetual nor a periodic inventory system.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 12DQ

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Cost of goods sold is determined only at the end of the accounting period in
a perpetual inventory system.
a periodic inventory system.
both a perpetual and a periodic inventory system.
● neither a perpetual nor a periodic inventory system.

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Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual inventory system b. Periodic inventory system c. Both perpetual and periodic inventory systems Required: Match each option with one of the following: 1. Only revenue is recorded as sales are made during the period; the cost of goods sold is recorded at the end of the period. 2. Cost of goods sold is determined as each sale is made. 3. Inventory purchases are recorded in an inventory account. 4. Inventory purchases are recorded in a purchases account. 5. Cost of goods sold is determined only at the end of the period by subtracting the cost of ending inventory from the cost of goods available for sale. 6. Both revenue and cost of goods sold are recorded during the period as sales are made. 7. The inventory is verified by a physical count.
What is the difference in reporting requirements for customer-returned merchandise in sellable condition under a perpetual inventory system versus a periodic inventory system?
This type of inventory system does not require an entry to Merchandise Inventory until a physical inventory has been taken. a. Periodic inventory system b. Perpetual inventory system c. Merchandise inventory system d. Beginning inventory system e. Ending inventory system
Which inventory costing method is almost always done on a perpetual basis? A. specific identification B. first-in, first-out C. last-in, first-out D. weighted average
LO2 Under the perpetual system of accounting for inventory, the current merchandise inventory and the cost of goods sold are not determined until the end of the accounting period when a physical inventory is taken.
Which of the following would cause periodic ending inventory to be overstated? A. Goods held on consignment are omitted from the physical count. B. Goods purchased and delivered, but not yet paid for, are included in the physical count. C. Purchased goods shipped FOB destination and not yet delivered are included in the physical count. D. None of the above
Cost of goods sold is debited each time a sale is made under which of the following inventory systems?A. Perpetual systemB. COGS systemC. Periodic systemD. Perpetual and Periodic system
In a periodic inventory system, cost of goods sold is not recorded as each sale occurs. Group startsTrue or False
The account used to adjust the perpetual inventory records when a difference exists between the physical count and the amount in the perpetual inventory records is called a. Inventory Short and Over. b. Estimated Returns Inventory. c. Inventory Shrinkage. d. Merchandise Inventory
Which of the following is not a characteristic of a perpetual inventory system? O Cost of goods sold is recorded with each sale. Inventory purchases are debited to a Inventory account. O Inventory records are kept for every item. O Cost of goods sold is determined as the amount of purchases less the change in inventory.
Which of the following is a true statement about inventory systems? A perpetual system determines cost of goods sold only at the end of the accounting period. Periodic inventory systems require more detailed inventory records. A periodic system requires cost of goods sold be determined after each sale. Perpetual inventory systems require more detailed inventory records.
When a periodic inventory system is used, a.only revenue is recorded each time a sale is made. b.only the cost of goods sold is recorded each time a sale is made. c.only the reduction of inventory is recorded each time a sale is made. d.None of these choices are corre