Purchases (at sales price) Purchase returns (at cost) Purchase returns (at sales price) Beginning inventory (at cost)

Q: Define the term merchandise returns.

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: In accountinf for sales discounts, most companies use the a. Allowance method b. Gross price…

A: The most commonly used method is the gross price method.in these sales, the discount is deducted…

Q: Gross profit isA) Cost of goods sold + Opening stockB) Sales cost of goods soldC) Sales PurchasesD)…

A: Gross profit is a financial metric used to assess a company's financial health and business model by…

Q: Describe diff erent inventory valuation methods (cost formulas).

A: The manner in which an organization calculates the product costs (inventory value assessment)…

Q: Which inventory costing method produces a more accurate income statement – FIFO or LIFO? ___________…

A: Lets understand the basics. There are various inventory methods are followed for calculating ending…

Q: 1. Journalize the adjustment for inventory shrinkage. 2. Journalize the adjustment for estimated…

A: Given: Merchandise inventory = $ 5,200 Inventory on June 30, 2018 = $ 4,900 Amount of Sold…

Q: A sales discount is added in calculating net sales

A: The net sales are reported in the income statement of the company. The expenses would be deducted…

Q: For each of the following formulas, select the correct name of the formula: Sales Revenue - Sales…

A: The given formulas are matched below:

Q: If a company uses a purchase discount account, the cost recorded when inventory is purchases is its

A: Detailed explanation:Purchase discount is the discount received when a company pays its account…

Q: oods purchased and held for resale are commonly known as _____. perpetual inventoryperiodic…

A: Periodic Inventory System: The periodic inventory system records and updates the inventory at the…

Q: Using a perpetual inventory system, the entry to record the return of inventory previously purchased…

A: Perpetual inventory system: It is a method of inventory management that records real time…

Q: When recording a purchase of inventory on credit, which accounts are typically affected? A) Debit…

A: When assets or expenses increases it should be debited and when decreases it should be…

Q: How do calculate the Cost of Goods Sold without the beginning inventory nor the ending inventory??

A: Cost of goods sold is the total costs incurred on those units of goods or products which are sold by…

Q: Gross profit is calculated as the difference between net sales revenue and​ ________.         A.…

A: Revenue- Revenue refers to the quantity of cash that a corporation actually received during the…

Q: Using the following letters to represent items: P = purchases (net) C = cost of good sold B =…

A: We know, Ending inventory = Begining inventory + Purchases - Cost of good sold E = B + P - C

Q: Define total inventory costs (TIC)

A: The formula to compute total inventory cost as follows:

Q: Define days' sales in inventory (what do the results mean). Provide an example

A: Days sales in inventory means how much days company will take to convert its inventory into sales.…

Q: How do you use FIFO and LIFO to calculate the cost of inventory?

A: Lets understand the meaning of LIFO and FIFO method. In First In First Out (FIFO) method company…

Q: Explain an example how to calculate net cost of inventory.

A: Net Cost of Inventory indicates the actual cost of inventory purchased. Net cost of inventory is…

Q: The price a business pays for goods it purchases to sell is called: A. markup B. purchase price C.…

A: Any item that is displayed for sale and intended to be sold to customers in exchange for a profit is…

Q: Which inventory system records both sales and cost of goods sold at the point of sale? Group of…

A: There are different types of inventory system being used depending the record of pricing and record…

Q: Define Inventory turnover ratio.

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…

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.