Which of the following statements is correct concerning the operati merchandiser who chooses to use a periodic inventory system? Merchandise inventory is always up to date. The merchandiser is not concerned about inventory shrinkage. Cost of goods sold is recorded when a sale is made. The merchandiser is only allowed to use FIFO to calculate its ending inventory cost. Inventory reported on the balance sheet is adjusted based on a physical inventory count.

Which of the following statements is correct concerning the operati merchandiser who chooses to use a periodic inventory system? Merchandise inventory is always up to date. The merchandiser is not concerned about inventory shrinkage. Cost of goods sold is recorded when a sale is made. The merchandiser is only allowed to use FIFO to calculate its ending inventory cost. Inventory reported on the balance sheet is adjusted based on a physical inventory count.

Name: Which of the following statements is correct concerning the operation
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Description: Which of the following statements is correct concerning the operations of amerchandiser who chooses to use a periodic inventory system?O Merchandise inventory is always up to date.The merchandiser is not concerned about inventory shrinkage.Cost of g

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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Under the perpetual inventory system, in addition to making the entry to record a sale, a company would a. Debit Merchandise Inventory and Credit to Cost of Goods Sold. b. Debit to Cost of Goods Sold and credit to Merchandise Inventory c. Deb it to Cost of Goods Sold and credit to purchases d. No entry
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Under the perpetual inventory method, what account is credited when adjusting for the estimated cost of the merchandise sold this period, but expected to be returned next 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.
What is the treatment of the following items in connection with the retail inventory method? g. Sales return h. Employee discount i. Normal and abnormal shortage, shrinkage, spoilage and breakage
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.
Items Included in Inventory The following are several items that Golosow Company's controller has questioned regarding their inclusion in inventory: Required: For each of the following items, indicate whether Golosow should include them in inventory. 1. An invoice has been received for goods ordered. The goods were shipped FOB destination but have not been received. 2. Purchases have been ordered and received (shipping terms were FOB destination), but no invoice has arrived. 3. Product was shipped to a customer today, FOB destination, and the invoice mailed. 4. Purchases are in the receiving department, but they are damaged and will be returned. 5. Product is in the shipping department, and the invoice has not been mailed to the customer. Shipping terms are FOB shipping point. 6. Golosow has inventory in its possession from Tate Company. The inventory is to be sold by Golosow under a consignment arrangement with Tate.
When a company uses the perpetual inventory system in accounting for its merchandise inventory, which of the following is true? Multiple Choice The inventory account is updated after each sale The inventory account is updated throughout the year as purchases are made. Cost of goods sold is computed at the end of the accounting period rather than at each sale. None of the other alternatives are correct Purchases are recorded in the cost of goods sold account.
Petco Inc. uses the periodic inventory system. Assess the effect on net income of including goods in transit f.o.b shipping point in purchases, but not in ending inventory. a. Overstate net income. b. No effect on net income. O c. Not sufficient information is provided to assess the effect on net income. O d. Understate net income.