Homework Answers
1]
True. Operating cycle = days in inventory + days receivable. For a merchandising company, the operating cycle begins with purchase of inventory and ends with collection of receivables.
2]
True. Inventory shrinkage is difference between inventory as in the books and actual physical inventory in the warehouse. This difference could be due to normal wastage, damage, pilferage etc.
3]
True. FOB shipping point means that the title of goods passes from the seller to the buyer when the goods leave the seller's place of business or seller's shipping point.
4]
False. Under periodic inventory system, only one journal entry is required to record sales. A perpetual inventory system required two journal entries.
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True or False (A=Ture; B=False) 1 A merchandising company's operating cycle begins with the acquisition of...
LOL. What are merchandising operations a) List and describe the operating cycle of a merchandising business:...
LOL. What are merchandising operations a) List and describe the operating cycle of a merchandising business: b) In your own words, define Cost of Goods Sold? c) In your own words, define Gross Profit and how is it calculated? a) What is the difference between the period and perpetual inventory systems? LO2. How are purchases of merchandise inventory recorded in a perpetual inventory system a) Using the perpetual system, Journalize for: a) the purchase of merchandise inventory of $1,000 on...
True-Pake F 1. FOB shipping point means the seller incurs the shipping costs. A company is...
True-Pake F 1. FOB shipping point means the seller incurs the shipping costs. A company is more likely to know the amount of inventory on hand at any time if it uses 2. the perpetual system than if it uses the periodic system. ue less cost of goods sold equals gross profit. of F 3. Net sales revenue T sales discounts and sales returns/allowances equals net sales. 5. A reduction given by the seller for sales discount by the seller....
Question 8 (2 points) Merchandise inventory is a significant current liability for most merchandising companies. True...
Question 8 (2 points) Merchandise inventory is a significant current liability for most merchandising companies. True False Question 9 (2 points) The method that requires a physical counting of the inventory is called the specific identification inventory method. True False Question 10 (2 points) Under lower of cost or market, market refers to current replacement cost. True False Question 11 (2 points) Under the perpetual inventory system a sales transaction requires two journal entries. True False Question 12 (2 points)...
Match each of the following terms (a-h) with the correct definition below. Clear All Inventory system...
Match each of the following terms (a-h) with the correct definition below. Clear All Inventory system that updates the merchandise inventory account only at the end of the accounting period based on a physical count of merchandise on hand. Periodic inventory system Statement where net income is determined by deducting all expenses from all revenues. Multiple-step income statement Inventory system that updates the merchandise inventory account for every purchase and sale transaction. FOB shipping point Payment arrangements determined by the...
1. Operating expenses include cost of goods sold. A) True B) False 2. For a merchandising...
1. Operating expenses include cost of goods sold. A) True B) False 2. For a merchandising company, the difference between net sales and operating expensesi. called gross margin. A) True B) False 3. Sales Returns and Allowances is described as a contra-revenue account. A) True B) False 4. Freight Out Expense is included in the cost of goods sold calculation. A) True B) False 5. General and administrative expenses are a category of operating expense. A) True B). False 6....
A. Credit period B. Credit terms C. Discount period D. FOB destination E. FOB shipping point...
A. Credit period B. Credit terms C. Discount period D. FOB destination E. FOB shipping point F. General and administrative expenses G. Gross profit H. Inventory shrinkage 1. Merchandise inventory J. Multiple-step income statement K. Periodic inventory system L. Perpetual inventory system M. Purchase allowance N. Purchases discounts O. Sales discount P. Selling expenses Q. Shrinkage R. Single-step income statement S. Trade discount __A cash discount granted from the view of the seller, indicated in the credit terms on the...
THANK YOU SO MUCH I WILL BE SURE TO LEAVE A GREAT RATING AND NOTE!!!!! 20. The primary difference between the periodic and perpetual inventory systems is that a periodic system determines the inventor...
THANK YOU SO MUCH I WILL BE SURE TO LEAVE A GREAT RATING AND NOTE!!!!! 20. The primary difference between the periodic and perpetual inventory systems is that a periodic system determines the inventory on hand only at the end of the accounting period periodic system provides an easy means to determine inventory shrinkage periodic system records the cost of the sale on the date the sale is made periodic system keeps a record showing the inventory on hand at...
EX#2 - Glossary: Define an inventory system in which the company does not maintain detailed records...
EX#2 - Glossary: Define an inventory system in which the company does not maintain detailed records of goods on hand throughout the accounting period and determines cost of goods sold only at the end of the accounting period. A Perpetual inventory system Periodic inventory system Just-in-Time Inventory System 0. Specific Identification Inventory Method TEXA2-Glossary: A perpetual inventory System Als updated each time an Her is purchase and updates cost of goods sold. B. Uses optical scanners and bar codes to...
QUESTION 8 Which statement is false? Taking a physical inventory involves actually counting, weighing, or measuring...
QUESTION 8 Which statement is false? Taking a physical inventory involves actually counting, weighing, or measuring each kind of inventory on hand. No matter whether a periodic or perpetual inventory system is used, all companies need to determine inventory quantities at the end of each accounting period An inventory count is generally more accurate when goods are not being sold or received during the counting. Companies that use a perpetual inventory system must take a physical inventory to determine inventory...
@ Test Bank for Accounting Principles, Eighth Edition The multiple-step form of income statement is easier...
@ Test Bank for Accounting Principles, Eighth Edition The multiple-step form of income statement is easier to read than the single-step form 22 Merchandise inventory is classified as a current asset in a classified balance sheet Gain on sale of equipment and interest expense are reported under other revenues and gains in a multiple-step income statement. 23. The gross profit section for a merchandising company appears on both the multiple-step and single-step forms of an income statement. In a multiple-step...
LOL. What are merchandising operations a) List and describe the operating cycle of a merchandising business: b) In your own words, define Cost of Goods Sold? c) In your own words, define Gross Profit and how is it calculated? a) What is the difference between the period and perpetual inventory systems? LO2. How are purchases of merchandise inventory recorded in a perpetual inventory system a) Using the perpetual system, Journalize for: a) the purchase of merchandise inventory of $1,000 on...
True-Pake F 1. FOB shipping point means the seller incurs the shipping costs. A company is more likely to know the amount of inventory on hand at any time if it uses 2. the perpetual system than if it uses the periodic system. ue less cost of goods sold equals gross profit. of F 3. Net sales revenue T sales discounts and sales returns/allowances equals net sales. 5. A reduction given by the seller for sales discount by the seller....
Question 8 (2 points) Merchandise inventory is a significant current liability for most merchandising companies. True False Question 9 (2 points) The method that requires a physical counting of the inventory is called the specific identification inventory method. True False Question 10 (2 points) Under lower of cost or market, market refers to current replacement cost. True False Question 11 (2 points) Under the perpetual inventory system a sales transaction requires two journal entries. True False Question 12 (2 points)...
Match each of the following terms (a-h) with the correct definition below. Clear All Inventory system that updates the merchandise inventory account only at the end of the accounting period based on a physical count of merchandise on hand. Periodic inventory system Statement where net income is determined by deducting all expenses from all revenues. Multiple-step income statement Inventory system that updates the merchandise inventory account for every purchase and sale transaction. FOB shipping point Payment arrangements determined by the...
1. Operating expenses include cost of goods sold. A) True B) False 2. For a merchandising company, the difference between net sales and operating expensesi. called gross margin. A) True B) False 3. Sales Returns and Allowances is described as a contra-revenue account. A) True B) False 4. Freight Out Expense is included in the cost of goods sold calculation. A) True B) False 5. General and administrative expenses are a category of operating expense. A) True B). False 6....
A. Credit period B. Credit terms C. Discount period D. FOB destination E. FOB shipping point F. General and administrative expenses G. Gross profit H. Inventory shrinkage 1. Merchandise inventory J. Multiple-step income statement K. Periodic inventory system L. Perpetual inventory system M. Purchase allowance N. Purchases discounts O. Sales discount P. Selling expenses Q. Shrinkage R. Single-step income statement S. Trade discount __A cash discount granted from the view of the seller, indicated in the credit terms on the...
EX#2 - Glossary: Define an inventory system in which the company does not maintain detailed records of goods on hand throughout the accounting period and determines cost of goods sold only at the end of the accounting period. A Perpetual inventory system Periodic inventory system Just-in-Time Inventory System 0. Specific Identification Inventory Method TEXA2-Glossary: A perpetual inventory System Als updated each time an Her is purchase and updates cost of goods sold. B. Uses optical scanners and bar codes to...
QUESTION 8 Which statement is false? Taking a physical inventory involves actually counting, weighing, or measuring each kind of inventory on hand. No matter whether a periodic or perpetual inventory system is used, all companies need to determine inventory quantities at the end of each accounting period An inventory count is generally more accurate when goods are not being sold or received during the counting. Companies that use a perpetual inventory system must take a physical inventory to determine inventory...
@ Test Bank for Accounting Principles, Eighth Edition The multiple-step form of income statement is easier to read than the single-step form 22 Merchandise inventory is classified as a current asset in a classified balance sheet Gain on sale of equipment and interest expense are reported under other revenues and gains in a multiple-step income statement. 23. The gross profit section for a merchandising company appears on both the multiple-step and single-step forms of an income statement. In a multiple-step...
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