Bundle: College Accounting, Chapters 1-27, Loose-Leaf Version, 22nd + CengageNOWv2, 2 terms Printed Access Card
22nd Edition
ISBN: 9781305930421
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Textbook Question
Chapter 13, Problem 3TF
LO2 Under the perpetual system of accounting for inventory, the current merchandise inventory and the cost of goods sold are not determined until the end of the accounting period when a physical inventory is taken.
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Students have asked these similar questions
Cost of goods sold is determined only at the end of the accounting period in
a perpetual inventory system.
a periodic inventory system.
both a perpetual and a periodic inventory system.
● neither a perpetual nor a periodic inventory system.
Which of the following is not a characteristic of a
perpetual inventory system?
O Cost of goods sold is recorded with each sale.
Inventory purchases are debited to a Inventory
account.
O Inventory records are kept for every item.
O Cost of goods sold is determined as the amount of
purchases less the change in inventory.
8. Under a perpetual inventory system, the adjusting entry to account for inventory shrinkage
would include
O credit to miscellaneous expense.
O credit to cost of goods sold.
O credit to inventory.
Odebit to miscellaneous expense.
Chapter 13 Solutions
Bundle: College Accounting, Chapters 1-27, Loose-Leaf Version, 22nd + CengageNOWv2, 2 terms Printed Access Card
Ch. 13 - An overstatement of ending inventory in the year...Ch. 13 - An understatement of ending inventory in the year...Ch. 13 - LO2 Under the perpetual system of accounting for...Ch. 13 - LO3 A fiscal year that starts and ends at the time...Ch. 13 - LO3 If goods are shipped FOB shipping point, the...Ch. 13 - An understatement of ending inventory in the year...Ch. 13 - Prob. 2MCCh. 13 - In rimes of rising prices, the inventory cost...Ch. 13 - In rimes of rising prices, the inventory cost...Ch. 13 - In the application of lower-of-cost-or-market,...
Ch. 13 - LO1 If the ending inventory is overstated by...Ch. 13 - Using the following information, compute the...Ch. 13 - Use the following information to compute cost of...Ch. 13 - Kulsrud Company would like to estimate the current...Ch. 13 - What financial statements are affected by an error...Ch. 13 - What is the main difference between the periodic...Ch. 13 - Is a physical inventory necessary under the...Ch. 13 - Is a physical inventory necessary under the...Ch. 13 - In a period of rising prices, which inventory...Ch. 13 - What two factors are taken into account by the...Ch. 13 - Which inventory method always follows the actual...Ch. 13 - When lower-of-cost-or-market is assigned to the...Ch. 13 - List the three steps followed under the gross...Ch. 13 - List the five steps followed under the retail...Ch. 13 - INVENTORY ERRORS Assume that in year 1, the ending...Ch. 13 - JOURNAL ENTRIESPERIODIC INVENTORY Paul Nasipak...Ch. 13 - JOURNAL ENTRIESPERPETUAL INVENTORY Joan Ziemba...Ch. 13 - ENDING INVENTORY COSTS Sandy Chen owns a small...Ch. 13 - LOWER-OF-COST-OR-MARKET Stalberg Companys...Ch. 13 - SPECIFIC IDENTIFICATION, FIFO, LIFO, AND...Ch. 13 - COST ALLOCATION AND LOWER-OF-COST-OR-MARKET...Ch. 13 - Prob. 8SPACh. 13 - RETAIL INVENTORY METHOD The following information...Ch. 13 - INVENTORY ERRORS Assume that in year 1, the ending...Ch. 13 - JOURNAL ENTRIESPERIODIC INVENTORY Amy Douglas owns...Ch. 13 - JOURNAL ENTRIESPERPETUAL INVENTORY Doreen Woods...Ch. 13 - ENDING INVENTORY COSTS Danny Steele owns a small...Ch. 13 - LOWER-OF-COST-OR-MARKET Bouie Companys beginning...Ch. 13 - SPECIFIC IDENTIFICATION, FIFO, LIFO, AND...Ch. 13 - COST ALLOCATION AND LOWER-OF-COST-OR-MARKET Hall...Ch. 13 - GROSS PROFIT METHOD A flood completely destroyed...Ch. 13 - RETAIL INVENTORY METHOD The following information...Ch. 13 - Hurst Companys beginning inventory and purchases...Ch. 13 - Bhushan Company has been using LIFO for inventory...
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- What is the difference in reporting requirements for customer-returned merchandise in sellable condition under a perpetual inventory system versus a periodic inventory system?arrow_forwardThis type of inventory system does not require an entry to Merchandise Inventory until a physical inventory has been taken. a. Periodic inventory system b. Perpetual inventory system c. Merchandise inventory system d. Beginning inventory system e. Ending inventory systemarrow_forwardWhy is it necessary to adjust the Merchandise Inventory account under a periodic inventory system?arrow_forward
- Which of the following would cause periodic ending inventory to be overstated? A. Goods held on consignment are omitted from the physical count. B. Goods purchased and delivered, but not yet paid for, are included in the physical count. C. Purchased goods shipped FOB destination and not yet delivered are included in the physical count. D. None of the abovearrow_forward( Appendix 6B) For each inventory costing method, perpetual and periodic systems yield the same amounts for ending inventory and cost of goods sold. Do you agree or disagree with this statement? Explain.arrow_forwardWhich of the following financial statements would be impacted by a current-year ending inventory error, when using a periodic inventory updating system? A. balance sheet B. income statement C. neither statement D. both statementsarrow_forward
- What does an increase in inventory imply? How would this increase in inventory be reported under the indirect method?arrow_forwardUnder the retail inventory method, freight-in would be included in the calculation of the goods available for sale for which of the following?arrow_forwardUnder the periodic inventory system, the ending inventory is entered by debiting Merchandise Inventory and crediting Income Summary.arrow_forward
- 2. An account used in the perpetual inventory system that is not used in the periodic inventory system is a) Purchases b) Sales Returns and Allowances c) Merchandise Inventory d) Salesarrow_forward31) What is the Adjusting journal entry to record when merchandise inventory is overstated in the accounting records under perpetual inventory system? a. Merchandise inventory Dr / Account payable Cr b. Merchandise inventory Dr / Cost of goods sold Cr c. Cost of goods sold Dr / Merchandise inventory Cr d. Account payable Dr / Merchandise inventory Crarrow_forwardUnder a perpetual inventory system, acquisition of inventory is dented to the purchases account. True or false?arrow_forward
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