Easy Software uses a periodic inventory system. Its inventory was $36,000 at the beginning of the year and $48,000 at the end. During the year, Easy Software made purchases of merchandise totaling $99,000. (Identify the two correct answers). a To use this system, Easy must take a complete physical inventory count twice each year. b Prior to making adjusting and closing entries at year-end, the balance in Easy’s Inventory account is $48,000. c The cost of goods sold for the year is $87,000. d As sales transactions occur during the year, Best makes no entries to update its inventory records or to record the cost of goods sold.
Easy Software uses a periodic inventory system. Its inventory was $36,000 at the beginning of the year and $48,000 at the end. During the year, Easy Software made purchases of merchandise totaling $99,000. (Identify the two correct answers). a To use this system, Easy must take a complete physical inventory count twice each year. b Prior to making adjusting and closing entries at year-end, the balance in Easy’s Inventory account is $48,000. c The cost of goods sold for the year is $87,000. d As sales transactions occur during the year, Best makes no entries to update its inventory records or to record the cost of goods sold.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Indicate the best answer(s) for each question:
- Easy Software uses a periodic inventory system. Its inventory was $36,000 at the beginning of the year and $48,000 at the end. During the year, Easy Software made purchases of merchandise totaling $99,000. (Identify the two correct answers).
a To use this system, Easy must take a complete physical inventory count twice each year.
b Prior to making adjusting and closing entries at year-end, the balance in Easy’s Inventory account is $48,000.
c The cost of goods sold for the year is $87,000.
d As sales transactions occur during the year, Best makes no entries to update its inventory records or to record the cost of goods sold.
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