Answers only Under the perpetual inventorysystem, all purchases of merchandiseare debited to the account entitleda. Merchandise Inventoryb. Cost of Merchandise Soldc. Cost of Merchandise Available for SaleO d. PurchasesWhich of these events cannot bequantified and recorded as anaccounting transaction?The election of a new set of board ofdirectorsThe purchase of a new computerThe sale of store equipmentPayment on income taxes

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

Under the perpetual inventory system, all purchases of merchandise are debited to the account entitled a. Merchandise Inventory O b. Cost of Merchandise Sold c. Cost of Merchandise Available for Sale d. Purchases Which of these events cannot be quantified and recorded as an accounting transaction? The election of a new set of board of directors The purchase of a new computer The sale of store equipment Payment on income taxes

Under the perpetual inventory system, all purchases of merchandise are debited to the account entitled a. Merchandise Inventory O b. Cost of Merchandise Sold c. Cost of Merchandise Available for Sale d. Purchases Which of these events cannot be quantified and recorded as an accounting transaction? The election of a new set of board of directors The purchase of a new computer The sale of store equipment Payment on income taxes

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 11E: Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost...

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Which of the following describes features of a perpetual inventory system? A. Technology is normally used to record inventory changes. B. Merchandise bought is recorded as purchases. C. An adjusting journal entry is required at year end, to match physical counts to the asset account. D. Inventory is updated at the end of the period.
Consider each of the following independent situations. Should a company report the goods in its inventory? (a) Goods purchased by the company with shipping terms FOB shipping point that are in transit at the end of the year (b) Goods received by the company on consignment (c) An estimate of the amount of goods sold by the company that it expects the buyer to return (d) Goods required to be purchased by the company under an unconditional purchase obligation
Using the information provided in RE8-4, prepare the journal entry to record the write-down of inventory for Paul Corporation assuming that it uses the allowance method instead of the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down if inventory.
The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2019: a. Prepare the cost of merchandise sold section of the income statement for the year ended April 30, 2019, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 2019. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method. Present the data in the form illustrated in Exhibit 4.
Using the perpetual inventory system, what account is debited when a business finds that its physical count of inventory is greater than the recorded amount?
Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3.
Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method. Present the data in the form illustrated in Exhibit 4.
Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual inventory system b. Periodic inventory system c. Both perpetual and periodic inventory systems Required: Match each option with one of the following: 1. Only revenue is recorded as sales are made during the period; the cost of goods sold is recorded at the end of the period. 2. Cost of goods sold is determined as each sale is made. 3. Inventory purchases are recorded in an inventory account. 4. Inventory purchases are recorded in a purchases account. 5. Cost of goods sold is determined only at the end of the period by subtracting the cost of ending inventory from the cost of goods available for sale. 6. Both revenue and cost of goods sold are recorded during the period as sales are made. 7. The inventory is verified by a physical count.
Under the periodic inventory system, the ending inventory is entered by debiting Merchandise Inventory and crediting Income Summary.
Under the perpetual inventory system, how does the seller record sales made on account?
Which of the following accounts are used when recording a purchase using a periodic inventory system? A. cash, purchases B. accounts payable, sales C. accounts payable, accounts receivable D. cash, merchandise inventory