4. Which accounts are affected in the closing process under a perpetual inventory system?Oincome from operations and cost of goods soldcost of goods sold, sales returns and allowances, and sales discountsOgross profit, sales returns and allowances, and sales discountsOoperating expenses, sales revenue, and gross profit 5. A café that sells smoothies often has fruit that becomes rotten and the employees have to throwit away. What type of system does the café use to count inventory?Oagricultural inventory systemOperiodic inventory systemperpetual inventory systemcontinuous inventory system

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Answered: 4. Which accounts are affected in the…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 11E: Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost...

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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.
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 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.
Under the perpetual inventory system, how does the seller record sales made on account?
LO2 Under the perpetual system of accounting for inventory, the current merchandise inventory and the cost of goods sold are not determined until the end of the accounting period when a physical inventory is taken.
Under the periodic inventory system, the ending inventory is entered by debiting Merchandise Inventory and crediting Income Summary.
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.
This type of inventory system does not require an entry to Merchandise Inventory until a physical inventory has been taken. a. Periodic inventory system b. Perpetual inventory system c. Merchandise inventory system d. Beginning inventory system e. Ending inventory system
Use the first-in, first-out method (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for B75 Company, considering the following transactions.
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.
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
Assume that the business in Exercise 7-3 maintains a perpetual inventory system, costing by the last-in, first-out method. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4.

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