In comparing the accounts of a merchandising company with those of a service company, what additional accounts would the merchandising company likely use, assuming it employs a perpetual inventory system?

Q: What is the main difference between a perpetual inventory system and a periodic inventory system?…

A: Inventory can be valued under two methods. 1. perpetual inventory method 2. Periodic inventory…

Q: Discuss the factors affecting a company’s choice of inventory method

A: An inventory valuation allows a company to provide a monetary value for items that make up their…

Q: A major advantage of the retail inventory method is that it hides costs from competitors and…

A: Inventory is the current asset (goods or stock) which is held for the business for sale purpose.…

Q: When a customer returns goods, the merchandiser will:

A: Inventory:   Inventory refers to the raw materials, work-in process, and the finished goods…

Q: In the preparation of the worksheet of a merchandising business, the ending balance of the…

A: Merchandise inventory is the current assets, goods purchased or manufactured with the purpose of…

Q: Briefly explain the following terms

A: 1. Matching principle : The income recognition theory in accrual reporting specifies that earnings…

Q: State the standard method of determining the cost of goods sold by a retailing or a wholesaling…

A: The cost of goods sold includes the total cost of goods sold include the cost of goods that are sold…

Q: Which of the following costs do not come under inventory carrying cost calculation? Investment in a…

A: The ideal order quantity for a corporation to purchase in order to minimize inventory costs is known…

Q: Hugo Ltd., follows the LIFO system. From the particulars given below, ascertain the cost of sales…

A: Last-in, first-out method: Under the last-in-first-out method goods that are brought at later dates…

Q: In the revenue cycle (for sales on credit), a customer places an order for a certain product. Which…

A: Every time an order is received by an organisation, there is whole set of process that needs to be…

Q: Which function or department below records the decrease in inventory due to a sale? a. warehouse b.…

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: What effects on a retail store's accounting equation occur when merchandise returned by customers is…

A: Introduction:- The following Accounting Equation used for preparation of balance sheet as follows…

Q: Which of the following procedure is designed to prevent the company from ordering unnecessary items?…

A: D) Approval of purchase requisitions is the procedure designed to prevent the company from ordering…

Q: Distinguish among the types of inventory accounts for merchandising and manufacturing companies.

A: Merchandising firm means a firm which only deals in sale and purchase of a commodity but do not…

Q: What inventory systems do you know are used in a buying and selling business?

A: The inventory systems popularly used are the  1) Perpetual inventory system  2) Periodic inventory…

Q: What document signals that a company should record thepurchase of goods on account?a. Purchase…

A:

Q: The following describes the expenditure cycle manual procedures for a hypothetical company. The…

A: Expenditure Cycle The expenditure cycle is defined as the set of activities that are related to the…

Q: What is a perpetual inventory system? What kind of businesses use perpetual inventory systems?

A: There are two types of inventory methods that are perpetual and periodic.

Q: Why would a company choose to use an inventory costing method that estimates the cost of the goods…

A: In this question, we  explain that why would a company choose to use an inventory costing method…

Q: ) Is the accounting cycle in a merchandising operations different from a service operations?…

A: 1) yes the accounting cycle in a merchandising operations is different from a service operations .…

Q: compute the ending inventory using the retail method. Explain the steps that you would use in…

A: Inventory is the good which are the products which company have for the purpose of sale by the…

Q: Which one of the following groups of items best identifies various types of inventory opportunity…

A: Inventory Opportunity cost includes the costs to order and hold inventory, additionally on…

Q: The dollar amount paid by a retailer to acquire a product from a wholesaler is known as the…

A: Goods Purchase Cost: The cost of the products that were bought is the same as the merchandise's net…

Q: Explain how a retailing firm would determine the cost of goods sold during an accounting period.

A: Retailing firms are those firms that are run for the prime purpose of earning profits. The cost of…

Q: Of what significance is inventory turnover to a retail store?

A:

Q: Discuss the treatment of freight-in, net markups, normal spoilage, and employee discounts in the…

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: A merchandising business purchases goods for resale. A merchandiser makes a profit by selling goods…

A: Under the FIFO method, the cost of goods sold contains the cost of the earliest purchases. Under the…

Q: • Explain why there isn't there a "Cost of merchandise sold" expense for a service business.…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: What conditions must exist for the retail inventorymethod to provide valid results?

A: Retail inventory method: This method is like a gross profit method. It depends on the relationship…

Q: Prepare a data flow diagram and a system flowchart of the expenditure cycle procedures previously…

A: Expenditure Cycle:   The expenditure cycle is defined as the set of activities that are related to…

Q: In a merchandising (retail) type businesses, how can you use the periodic inventory method and still…

A: Retailing is a business activity under which no middlemen is required to sell the goods to the…

Q: Why do companies that use perpetual inventory systems alsotake an annual physical inventory? When is…

A: Perpetual inventory system The perpetual inventory system can be defined as the inventory system…

Q: Describe a situation where a merchant would use the specific identification method for recording…

A: A merchant would use specific identification method when the individual items in inventory can be…

Q: Define the following: Cost of goods sold

A: Since we are allowed to answer only three sub-parts of the question, I am answering only three for…

Q: What accounts are used to recognize a retailer’s purchase from a manufacturer on credit?A. accounts…

A: Purchase of goods on credit means inventory has been purchased but payment has not been made yet.…

Q: Journal entries for recording revenue and costs for service provider. For a traditional…

A: Prepare journal entries for the service companies:

Q: What is a periodic inventory system? What kind of businesses use periodic inventory systems?

A: Inventory: The term refers to the goods being purchased with the intention of resale. For…

Q: Which of the following types of inventory does a manufacturer not include in its Balance Sheet? A.…

A: The balance sheet is the financial statement which represents financial position of the business.

Q: Suppose you are being interviewed for a bookkeeping job for a retailer that uses a perpetual…

A: Introduction:- Journal entry is the first stage of accounting process. Journal entry used to record…

Q: You are comparing two companies, Ying Ltd and Yang Corporation, in the same industry. Ying focuses…

A: Inventory: Inventory can be defined as the current assets of the company that includes the raw…

Q: In what ways are the inventory accounts of a retailing companydifferent from those of a…

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: How do you find an inventory report for manufacturers?

A: Answer :- The inventory of manufacturer is reported in "Current assets" part of the balance sheet of…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.