Which of the following statements is not correct? A. Even in a perpetual inventory system, a...
Which of the following statements is not correct?
A.
Even in a perpetual inventory system, a business must count inventory at least one a year.
B.
Restaurants and small retail stores often use the periodic inventory system.
C.
In a periodic inventory system, merchandise inventory and purchasing systems are integrated with the records for Accounts Receivable and Sales Revenue.
D.
In a perpetual inventory system, the "cash register" at the store is a computer terminal that records sales and updates inventory records.
Homework Answers
OPTION - C.
Option C is not correct because in periodic inventory system it records the merchandise related to inventory, Purchases and sales but doesn't integrate Accounts receivable.
All other remaining options are correct because they record the transaction related to merchandise inventory and related details.
Add Answer to:
Which of the following statements is not correct?
A.
Even in a perpetual inventory system, a...
In a periodic inventory system, the "cash register" at the store is a computer terminal that...
In a periodic inventory system, the "cash register" at the store is a computer terminal that records sales and updates inventory records. True False
Which of the following statements regarding the periodic and perpetual inventory systems is correct? A. Inventory...
Which of the following statements regarding the periodic and perpetual inventory systems is correct? A. Inventory is updated after each sale under the periodic method B. Under the periodic method, the amount of inventory is not known until the end of the period when an inventory count is taken C. Inventory on hand is determined by a physical count only under the perpetual method D. The primary advantage of the periodic method is that it maintains detailed transaction-by-transaction records.
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...
5) A purchase return or allowance under a perpetual inventory system is credited to: A) Accounts...
5) A purchase return or allowance under a perpetual inventory system is credited to: A) Accounts Payable B) Purchase Returns and Allowances C) Inventory D) Purchases 6) Which of the following accounts is not a contra account? A. Inventory B. Accumulated Amortization C. Sales Returns and Allowances D. Sales Discounts 7) To calculate the gross margin percentage, A. Divide net sales by net income B. Divide current assets by current liabilities C. Divide total liabilities by total assets D. Divide...
Which of the following statements about a periodic inventory system is not correct? Select one: A....
Which of the following statements about a periodic inventory system is not correct? Select one: A. The system does not include an up-to-date inventory ledger. B. These systems are used primarily by small businesses with manual accounting systems. C. The balance in the Inventory account remains unchanged until the end of the period. D. The Cost of Goods Sold account is updated as sales transactions occur.
Question 4 Which of the following statements is correct? The purchases account is used under both...
Question 4 Which of the following statements is correct? The purchases account is used under both the periodic and perpetual inventory systems. The perpetual inventory system continually updates the inventory, purchase discounts, and cost of goods sold accounts. Under the periodic inventory system, neither the cost of goods sold account nor the inventory account is computed on a daily basis. The perpetual inventory system requires a closing entry in order to determine cost of goods sold before cost of goods...
10. In which way is a perpetual inventory system similar to a periodic system? A) Sales...
10. In which way is a perpetual inventory system similar to a periodic system? A) Sales are increased at the time of sale. B) Cost of goods sold is increased after an inventory count. C) Inventory is reduced after each sale. D) Cost of goods sold is increased after each sale.
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 Sport Store uses a perpetual inventory system. The following transactions occurred during April 2022: April...
The Sport Store uses a perpetual inventory system. The following transactions occurred during April 2022: April 2 Purchased merchandise from Rough Co. for $5,600 under credit terms of 1/15, n/30, FOB factory. 3 Paid $285 for shipping charges on the April 2nd purchase. 5 Sold merchandise to Fit Co. for $3,900 under credit terms of 2/10, n/30, FOB shipping point. The cost of the merchandise was $1,400. 6 Received a $800 credit memorandum acknowledging the return of merchandise purchased on...
A company that uses the perpetual inventory system sold goods to a customer for cash for...
A company that uses the perpetual inventory system sold goods to a customer for cash for $4.500 The cost of the goods sold was $1.000 Which of the wong journal entre correctly records this transaction? 4.600 4600 4.600 4.600 1,000 OA Merchandise Inventory Sales Revenue OB Accounts Receivable Cash Cost of Goods Sold Merchandise Inventory O c. Cash Sales Revenue Cost of Goods Sold Merchandise Inventory OD. Cost of Goods Sold Sales Revenue 1,000 4,600 1,000 4,600 1,000 4,600
In a periodic inventory system, the "cash register" at the store is a computer terminal that records sales and updates inventory records. True False
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...
10. In which way is a perpetual inventory system similar to a periodic system? A) Sales are increased at the time of sale. B) Cost of goods sold is increased after an inventory count. C) Inventory is reduced after each sale. D) Cost of goods sold is increased after each sale.
The Sport Store uses a perpetual inventory system. The following transactions occurred during April 2022: April 2 Purchased merchandise from Rough Co. for $5,600 under credit terms of 1/15, n/30, FOB factory. 3 Paid $285 for shipping charges on the April 2nd purchase. 5 Sold merchandise to Fit Co. for $3,900 under credit terms of 2/10, n/30, FOB shipping point. The cost of the merchandise was $1,400. 6 Received a $800 credit memorandum acknowledging the return of merchandise purchased on...
A company that uses the perpetual inventory system sold goods to a customer for cash for $4.500 The cost of the goods sold was $1.000 Which of the wong journal entre correctly records this transaction? 4.600 4600 4.600 4.600 1,000 OA Merchandise Inventory Sales Revenue OB Accounts Receivable Cash Cost of Goods Sold Merchandise Inventory O c. Cash Sales Revenue Cost of Goods Sold Merchandise Inventory OD. Cost of Goods Sold Sales Revenue 1,000 4,600 1,000 4,600 1,000 4,600
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