Distinguish between FOB shipping point and FOB destination. Identify the freight terms that will result in a debit to Inventory by the purchaser and a debit to Freight-Out by the seller.

Q: Define inventory.

A: Inventory: Inventory consist of total of three components: raw material, work-in-process and…

Q: Which of the following indicates that ownership of the purchased items changes as soon as the goods…

A: FOB point is the term which is used to determine when the ownership of the goods changes hand. FOB…

Q: SLO-5.2. Using the term means that the buyer will pay the freight charges of the merchandise to the…

A: whenever the goods are purchased at the raw material for the production of goods are purchase there…

Q: Which document helps to ensure that the receiving clerks actually count the number of goods…

A: The question is asking us to identify the document that helps receiving clerks to verify the number…

Q: What is the accounting treatment for supplies inventories if the purchases method is used to record…

A: Supplies generally form a part of current assets of the entity and represent the amount of supplies…

Q: In the Purchasing Process - Level 0 Diagram, a data flow called "inventory's purchase requisition"…

A: The purchasing process, also known as the procurement process, refers to the series of activities…

Q: Distinguish between sales book and sales account.

A: Sales book: Sales book is one of the subsidiary book of accounting in which all the transactions…

Q: Which of the following is not a name for a specific type ofinventory?a. Finished goods. c. Raw…

A:

Q: Define cost of goods sold. How is it computed? What two financial reports does it impact and how?

A: Cost of goods sold or COGS is the direct cost of the products sold/manufactured by the entity. It…

Q: Which one of the following statements best describes the purpose of a purchase order? A It is issued…

A: Purchase Order: A company before purchasing goods invite qoutation of goods from suppliers. When…

Q: What document signals that a company should record thepurchase of goods on account?a. Purchase…

A:

Q: Determine the goods and costs included in inventory.

A: The cost included in inventory includes all the costs incurred to prepare such inventory for sale.…

Q: The entry to record the return of merchandise from a customer would include a  debit to Sales…

A: Sale return means when goods sold to customer returned back because of any reson. When we sold goods…

Q: If the sale includes the seller paying the freight costs and assuming the responsibility for…

A: FOB shipping point sale: When the goods are shipped to the buyer, the title is transferred to the…

Q: Freight costs paid by a seller on merchandise sold to customers will cause an increase to a…

A: In operating expenses for the seller. Explanation:In operating expenses for the seller.When a seller…

Q: The primary purpose for using an inventory cost flowassumption is to:a. Parallel the physical flow…

A: Inventory cost flow assumptions: These are the assumptions including FIFO, LIFO, and weighted…

Q: When using a periodic inventory system and the purchaser directly incurs the freight costs, which…

A: A periodic inventory system updates the inventory data on a regular basis, usually at the conclusion…

Q: Who bears the freight when the terms of sale are (a) FOB shipping point, (b) FOB destination?

A: (a)If the sale is made with the terms FOB shipping point, the goods' ownership is transferred at the…

Q: Define Perpetual inventory system.

A: A perpetual inventory system updates and records the transaction as and when it occurs either at the…