Homework Answers
1. Answer is False
Since cost of goods sold is increased for decrease in LIFO reserve
i.e. cost of goods sold is debited
2. Answer is True
Since insurance paid by buyer is recorded at time of shipment
3. Answer is False
This is because under perpetual system, average cost is calculated
after every transaction, whereas in periodic inventory average is
calculated at end.
4. Answer is True
Since goods sent on consignment is property of consignor until
sold
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Cost of goods sold is credited for the amount of the decrease in the LIFO reserve....
The LIFO reserve is the amount by which the current year's cost of goods sold differs...
The LIFO reserve is the amount by which the current year's cost of goods sold differs between LIFO and FIFO. True or False True False
CHAPTER 6 16. Damaged and obsolete goods that can be sold: A. Are never counted as...
CHAPTER 6 16. Damaged and obsolete goods that can be sold: A. Are never counted as inventory. B. Are included in inventory at their full cost. C. Are included in inventory at their net realizable value. D. Should be disposed of immediately. E. Are assigned a value of zero. 17. Merchandise inventory includes: A. All goods owned by a company and held for sale. B. All goods in transit. C. All goods on consignment. D. Only damaged goods. E. Only...
One difference between periodic and perpetual inventory systems is: Multiple Choice Cost of goods sold is...
One difference between periodic and perpetual inventory systems is: Multiple Choice Cost of goods sold is always significantly higher under a perpetual system. Cost of goods sold is not recorded under a perpetual system until the end of the period. Cost of goods sold is always significantly higher under a periodic system. Cost of goods sold is not recorded under a periodic system until the end of the period.
I need the answers asap 1. Which of the following is a characteristic of a perpetual...
I need the answers asap
1. Which of the following is a characteristic of a perpetual inventory system? A) Inventory purchases are debited to a Purchases account. B) Inventory records are not kept for every item. C) Cost of goods sold is recorded with each sale. D) Cost of goods sold is determined as the amount of purchases less the change in inventory 2. Where should goods in transit that were recently purchased f.o.b. destination be included on the balance...
The Cost of Goods Sold account is credited to write down the inventory as required by...
The Cost of Goods Sold account is credited to write down the inventory as required by the lower−of−cost−or−market rule. True or False
E7-6 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost...
E7-6 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost $5 1,830 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 6,130 4,130 2,810 2 Required: Compute ending...
E7-6 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost...
E7-6 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Unit Units Cost Inventory, December 31, prior 1,980 $8 year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current 6,090 4,150 7 2,840 year Required: Compute ending...
A company had a decrease in the LIFO reserve during the year from $40,000 to $30,000....
A company had a decrease in the LIFO reserve during the year from $40,000 to $30,000. Which of the following would be true (ignore tax effects)? Multiple Choice Reported profits are higher under LIFO than under FIFO by $10,000 for that year. O Ending inventory is higher under FIFO than under LIFO by $30,000 at the end of the year. O O Cost of goods sold is higher under FIFO than under LIFO by $10,000 for that year. o All...
E7-5 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost...
E7-5 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost $5 1,930 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 7 5,080 2,830 4,040 Required: Compute ending...
Answer T or F 1. Transportation-in is considered a cost of purchasing inventory 2. In many...
Answer T or F 1. Transportation-in is considered a cost of purchasing inventory 2. In many retail businesses, inventory is the largest current asset. 3. As inventory is sold in many retail businesses, the largest expense is created. 4. The cost of merchandise is inventory is limited to the purchase price less any purchase discounts. 5. A business using the perpetual inventory system, with its detailed subsidiary records, does not need to take a physical inventory. 6. One of the...
The LIFO reserve is the amount by which the current year's cost of goods sold differs between LIFO and FIFO. True or False True False
CHAPTER 6 16. Damaged and obsolete goods that can be sold: A. Are never counted as inventory. B. Are included in inventory at their full cost. C. Are included in inventory at their net realizable value. D. Should be disposed of immediately. E. Are assigned a value of zero. 17. Merchandise inventory includes: A. All goods owned by a company and held for sale. B. All goods in transit. C. All goods on consignment. D. Only damaged goods. E. Only...
I need the answers asap
1. Which of the following is a characteristic of a perpetual inventory system? A) Inventory purchases are debited to a Purchases account. B) Inventory records are not kept for every item. C) Cost of goods sold is recorded with each sale. D) Cost of goods sold is determined as the amount of purchases less the change in inventory 2. Where should goods in transit that were recently purchased f.o.b. destination be included on the balance...
E7-6 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost $5 1,830 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 6,130 4,130 2,810 2 Required: Compute ending...
E7-6 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Unit Units Cost Inventory, December 31, prior 1,980 $8 year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current 6,090 4,150 7 2,840 year Required: Compute ending...
A company had a decrease in the LIFO reserve during the year from $40,000 to $30,000. Which of the following would be true (ignore tax effects)? Multiple Choice Reported profits are higher under LIFO than under FIFO by $10,000 for that year. O Ending inventory is higher under FIFO than under LIFO by $30,000 at the end of the year. O O Cost of goods sold is higher under FIFO than under LIFO by $10,000 for that year. o All...
E7-5 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost $5 1,930 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 7 5,080 2,830 4,040 Required: Compute ending...
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