O A. there is no need to take a physical count of inventory O B. beginning Merchandise Inventory, Purchases, and Freight In accounts are closed via the Income Summary Account OC. the process for closing the Income Summary and Dividends accounts differs from the process used in the perpetual inventory system O D. an adjusting entry is needed to record the ending Merchandise Inventory account balance

O A. there is no need to take a physical count of inventory O B. beginning Merchandise Inventory, Purchases, and Freight In accounts are closed via the Income Summary Account OC. the process for closing the Income Summary and Dividends accounts differs from the process used in the perpetual inventory system O D. an adjusting entry is needed to record the ending Merchandise Inventory account balance

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Description: When a periodic inventory system is used,O A. there is no need to take a physical count of inventoryO B. beginning Merchandise Inventory, Purchases, and Freight In accounts are closed via the Income Summary AccountO C. the process for closing the In

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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b) Complete the following table to show how FOB terms apply to merchandise inventory purchased by a merchandiser. FOB Term When does the title to the Who pays the goods transfer to the buyer? freight? Shipping Point Destination c) Journalize the following transaction for a merchandiser that uses the perpetual inventory system. Sold goods for cash of $1,200 and on account of $800. Total cost $1,500. Omit explanations.
The Inventory account is used in each of the following except the entry to record payment of freight on goods sold. goods purchased on account. the return of goods purchased. payment within the discount period.
If each purchase and sale of merchandise is recorded in the inventory and the cost of merchandise sold accounts, the method of accounting for merchandise inventory is the: A perpetual method. B) periodic method. C) gross profit method. D) administrative method.
19) The inventory system which do not use merchandise inventory account and reduces the record keeping of a merchandise business is described as ___________________________. a. Perpetual Inventory system b. None c. Periodic inventory system d. Both perpetual and periodic inventory system
Under a perpetual inventory system, acquisition of inventory is dented to the purchases account. True or false?
Which of the following is a difference between the periodic inventory system and the perpetual inventory system? a. The Merchandise Inventory account is used under the perpetual inventory system but not under the periodic inventory system. Ob. The Purchases account is used under the periodic inventory system but not under the perpetual inventory system. c. The Merchandise Inventory account is used under the periodic inventory system but not under the perpetual inventory system. Od. The Purchases account is used under the perpetual inventory system but not under the periodic inventory system.
The accountant for the Fred Company did not record a purchase of merchandise on credit or include the items in the ending inventory. The effect of these omissions on assets, liabilities, and retained earnings would be (assume a periodic inventory system): Assets Liabilities Retained Earnings a. Understate Understate Understateb. Understate Understate No effectc. No effect Understate No effectd. Understate No effect Understate
The merchandise Inventory account balance in the Trial Balance columns of a worksheet for a merchandising entity that uses periodic inventory system appears in both the debit and the credit columns appears in the credit column only is correct as stated is the same as it was at the beginning of the period
What is the inventory system called that discloses the amount of inventory on hand ONLY at the end of the accounting period when a physical count is taken? Group of answer choices retail physical periodic perpetual
S1: When you post an inventory transfer from warehouse 02 to warehouse 01, the system creates an inventory transfer document and a journal entry. S2: Missing inventories due to warehouse theft increases the stock quantities Only S1 is incorrect Both statements are incorrect Only S1 is correct Both statements are correct