Describe briefly cost of goods sold and the distinction between perpetual and periodic inventory procedures.
Describe briefly cost of goods sold and the distinction between perpetual and periodic inventory procedures.
Homework Answers
Cost of goods sold(COGS) also reffered as Cost of Sales refers to the direct cost of producing goods sold by the organisation.It includes the cost of materials and labour direclty related to goods.
Formula: COGS =Beginning Inventory+Purchases-Ending Inventory.
Distinction between perpetual and periodic inventory procedures.
| DISTINCTION POINT | PERPETUAL INVENTORY SYSTEM | PERIODIC INVENTORY SYSTEM |
| Meaning | System which traces every single movement of inventory, as and when they arise. | System whereby the inventory records are updated at periodic intervals. |
| Basis of Accounting | Book Records | Physical Verification |
| Updation of Inventory | Continuously | At the end of the accounting period. |
| Balancing Figure | Inventory | Cost of Goods Sold |
| Possibility of Inventory Control | Yes | No |
| Affect on business operation | This method does not influence the business operation. | The business operations need to be stopped during valuation. |
Add Answer to:
Describe briefly cost of goods sold and the distinction
between perpetual and periodic inventory procedures.
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.
Discuss briefly the difference between the perpetual inventory system and the periodic inventory system and how...
Discuss briefly the difference between the perpetual inventory system and the periodic inventory system and how is the amount of inventory determined when the periodic system is used?
In a periodic inventory system, the cost of goods sold is: In a periodic inventory system,...
In a periodic inventory system, the cost of goods sold is:
In a periodic inventory system, the cost of goods sold is: Multiple Choice Recorded as sales transactions occur. Determined by a computation which is performed at year-end, after the taking of a complete physical inventory. Equal to the beginning inventory, plus purchases made during the period, less sales revenue for the period. O Determined by subtracting the balance in the Gross Profit account from the amount of net sales.
Questions: 1. Briefly contrast the accounting procedures in perpetual and periodic inventory systems (5 points) 2....
Questions: 1. Briefly contrast the accounting procedures in perpetual and periodic inventory systems (5 points) 2. The December bank statement for Kowal Publishing Co. reports a balance of $13,847.59 at December 31, 2018. Kowal's accounting records, however, show a balance of $15,245.47 in the same bank account prior to preparation of the bank reconciliation. Which amount should be included in the amount of cash reported in Kowal's balance sheet at December 31, 2018? Explain your answer. (5 points)
1. Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic...
1. Calculate January's
ending inventory and cost of goods sold for the month using FIFO,
periodic system.
2. Calculate January's ending inventory and
cost of goods sold for the month using LIFO, periodic system.
3. Calculate January's ending inventory and
cost of goods sold for the month using FIFO, perpetual system.
4. Calculate January's ending inventory and
cost of goods sold for the month using Average cost, periodic
system
5. Calculate January's ending inventory and
cost of goods sold for...
Under a perpetual inventory system, the entry to record the cost of goods sold would include...
Under a perpetual inventory system, the entry to record the cost of goods sold would include a debit to O A. Inventory and a credit to Sales Revenue for the retail price of the inventory OB. Inventory and a credit to Cost of Goods Sold for the cost of the inventory OC. Cost of Goods Sold and a credit to Inventory for the cost of the inventory OD. Cost of Goods Sold and a credit to Inventory for the retail...
Periodic Inventory by three methods; cost of goods sold The units of an item available for...
Periodic Inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 50 units at $124 Mar. 10 Purchase 40 units at $134 Aug, 30 Purchase 20 units at $138 Dec. 12 Purchase 90 units at $144 There are 40 units of the item in the physical inventory of December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of...
Periodic inventory by three methods; cost of goods sold The units of an item available for...
Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 30 units at $100 Mar. 10 Purchase 50 units at $112 Aug. 30 Purchase 30 units at $118 Dec. 12 Purchase 90 units at $122 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of...
Periodic inventory by three methods; cost of goods sold The units of an item available for...
Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 50 units at $122 Mar. 10 Purchase 70 units at $134 Aug. 30 Purchase 10 units at $140 Dec. 12 Purchase 70 units at $142 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of...
Periodic inventory by three methods; cost of goods sold The units of an item available for...
Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 40 units at $120 Mar. 10 Purchase 50 units at $132 Aug. 30 Purchase 10 units at $140 Dec. 12 Purchase 100 units at $144 There are 40 units of the item in the physical inventory at December 31. The periodic inventory system is used Determine the ending inventory cost and the cost of...
In a periodic inventory system, the cost of goods sold is:
In a periodic inventory system, the cost of goods sold is: Multiple Choice Recorded as sales transactions occur. Determined by a computation which is performed at year-end, after the taking of a complete physical inventory. Equal to the beginning inventory, plus purchases made during the period, less sales revenue for the period. O Determined by subtracting the balance in the Gross Profit account from the amount of net sales.
Questions: 1. Briefly contrast the accounting procedures in perpetual and periodic inventory systems (5 points) 2. The December bank statement for Kowal Publishing Co. reports a balance of $13,847.59 at December 31, 2018. Kowal's accounting records, however, show a balance of $15,245.47 in the same bank account prior to preparation of the bank reconciliation. Which amount should be included in the amount of cash reported in Kowal's balance sheet at December 31, 2018? Explain your answer. (5 points)
1. Calculate January's
ending inventory and cost of goods sold for the month using FIFO,
periodic system.
2. Calculate January's ending inventory and
cost of goods sold for the month using LIFO, periodic system.
3. Calculate January's ending inventory and
cost of goods sold for the month using FIFO, perpetual system.
4. Calculate January's ending inventory and
cost of goods sold for the month using Average cost, periodic
system
5. Calculate January's ending inventory and
cost of goods sold for...
Under a perpetual inventory system, the entry to record the cost of goods sold would include a debit to O A. Inventory and a credit to Sales Revenue for the retail price of the inventory OB. Inventory and a credit to Cost of Goods Sold for the cost of the inventory OC. Cost of Goods Sold and a credit to Inventory for the cost of the inventory OD. Cost of Goods Sold and a credit to Inventory for the retail...
Periodic Inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 50 units at $124 Mar. 10 Purchase 40 units at $134 Aug, 30 Purchase 20 units at $138 Dec. 12 Purchase 90 units at $144 There are 40 units of the item in the physical inventory of December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of...
Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 40 units at $120 Mar. 10 Purchase 50 units at $132 Aug. 30 Purchase 10 units at $140 Dec. 12 Purchase 100 units at $144 There are 40 units of the item in the physical inventory at December 31. The periodic inventory system is used Determine the ending inventory cost and the cost of...
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