Concept explainers
Preparation of inventory record under various inventory methods describes the method of preparation of inventory record under various methods to reflect the cost of goods sold, ending inventory balance and gross profit earned under various methods. Under Periodic Inventory system, the records are maintained are maintained for units in and issued and cost will be assigned at the end of each period.
Requirement 1:
TheCost of Goods sold andEnding merchandise inventory under each method of periodic inventory system shall be determined.
Requirement 2:
The amount off Gross profit under various methods shall be determined.
Requirement 3:
The method suitable for lower income tax liability and method giving higher net income shall be determined.
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ACCOUNTING PRINCIPLES 122 5/16 >C<
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