Petco Inc. uses the periodic inventory system. Assess the effect on net income of including goods in transit f.o.b shipping point in purchases, but not in ending inventory. а. Overstate net income. b. No effect on net income. С. Not sufficient information is provided to assess the effect on net income. d. Understate net income.

Q: Compute the ending inventory and the cost of goods sold under the LIFO cost flow assumption assuming…

A: LIFO is last in first out method in which inventories which are purchased in last will be sold out…

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: The total purchase amount is the price agreed upon by the buyer and seller for an item, including…

Q: Assuming no beginning inventory, what is the trend of inventory prices if cost of goods sold…

A: Definition:   First-in-First-Out (FIFO): In this method, items purchased initially are sold first.…

Q: No entry is made at the time of a sale to the Cost of Goods Sold Account or the Inventory Account…

A: There are two type of inventory system follows by the organizations i.e. Periodic inventory system…

Q: When net realizable value is lower than cost, and the loss method applying the…

A: As per Accounting Standards on Inventory valuation, each item of inventory is calculated at cost or…

Q: Indicate whether the following statements are true or false. 1. A merchandising company reports…

A: 1) This statement is True. As Service Based Companies do not sell the products so there Income…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Solution Concepts Purchase account is an expense and if it is understated profit will increase and…

Q: Presented below are the components in determining cost of goods sold. Determine the missing amounts.…

A: Formula: Cost of goods available for sale = Beginning Inventory + Purchases

Q: Under the perpetual inventory system, increases and decreases in inventory are recorded through the…

A: Solution: Under perpetual inventory system, inventory records are updated with every purchase and…

Q: Jamison Corporation’s inventory cost in its balance sheet is lower using the first-in, first-out…

A: Option b. down is the answer.

Q: Which of the following statement about the inventory write-down is not correct? * If the cost is…

A: As per International Accounting Standards IAS 2- “ Inventory includes assets that are held for the…

Q: a) Given that Weber Inc. employs a perpetual inventory system, calculate the cost of goods available…

A: One accounting method that uses computerized point-of-sale devices to continuously record inventory…

Q: Woods Co. received merchandise on consignment. As of January 31, Jordan included the goods in…

A: Introduction: When goods are consigned, the consignor sends them to the agent (the consignee), who…

Q: Which of the ff needs an adjustment to the A/R account of ABS company? a. goods in transit of the…

A: Under the FOB destination point sale, the seller can record its sales only after the buyer takes the…

Q: Which of the following needs an adjustment to the accounts receivable account of ABC Company? a.…

A: Accounts receivable are created by an organisation when it records sales on credit. The accounts…

Q: True or False

A: Given statement is: Under the periodic inventory system, the merchandise inventory account is not…

Q: Margo Company uses the periodic inventory method and had the following inventory information…

A: Inventory valuation is the process of determining the cost of inventory at the end of the reporting…

Q: When inventory is held on consignment it should be?   Derecognized Reported as cost of goods sold…

A: Solution: When inventory is held on consignment it should be "Derecognized" as inventory is not…

Q: Listed below are several terms and phrases associated with inventory measurement. Pair each item…

A: FIFO : First-in-first-out LIFO : Last-in-first-out Gross method : The sales / purchases are recorded…

Q: The Habib Company did not include in their inventory count inventory that was sold to a customer…

A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…

Q: For each of the following inventory errors occurring in 2021, determine the effect of the error on…

A: The entire amount your organization spent as a cost directly tied to the selling of merchandise is…

Q: Under the perpetual inventory system, the Cost of Good Sold account is recorded … a. When purchases…

A: Perpetual Inventory System:- It is a system in which inventory gets recorded continuously and…

Q: When a periodic inventory system is used, a.only revenue is recorded each time a sale is made.…

A: Under perpetual inventory, both the sales entry and cost of goods sold entry are recorded each time…

Q: Do you agree with the following statements? Express your opinion on each statement.

A: 1: This statement is correct  This can be explained with the help of example: Suppose closing stock…

Q: Which of the following accounts is not included in inventory? a. Raw material b. Team c. Finished…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following accounts will not be found in the cost of merchandise sold section of the…

A: Income statement: The income statement is a financial statement that shows the net income earned or…

Q: Do you agree with the following statements? Express your opinion on each statement. An inventory…

A: 1) This statement is correct  This can be explain with the help of example: Suppose closing stock is…

Q: e. Inventory The company has the policy of stating all inventory on hand at the lower of cost and…

A: Lower of Cost and Net Realizable Value (Market) - It is method of inventory costing that values…

Q: ic inventory system wants to remove beginning estimated returns inventory, which of the following…

A: The right answer is option a.Estimated Returns Inventory

Q: Suppose Ajax Corporation overstates its ending inventory amount. What effect will this have on the…

A: Given information is: Ajax Corporation overstates its ending inventory amount.

Q: Under periodic inventory system, at the time of sale of inventory the journal entry for cost of…

A: Periodic Inventory System Basically there are two types of inventory system are there.  One is…

Q: The closing entries for a merchandising entity using the perpetual inventory system are fewer in…

A: The periodic inventory system represents that the inventory is counted periodically and not in…

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: Cost of sales means actual cost of goods that is being sold to the customers. It includes beginning…

Q: der the method, ending inventory is based on the costs of the most recent purchases. A. FIFO B.…

A: The question is multiple choice question. Required  Choose the Correct Option.

Q: Both the gross profit method and the retail inventory method provide a way to estimate ending…

A: Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during…

Q: Which of the following statement is FALSE for Merchandise inventory of the Business? a. It is a…

A: Merchandise inventory is classified as a current asset on the balance sheet. Assets normally have a…

Q: 55. Why is inventory, end is included in the computation of net income? * O A. To determine cost of…

A: Solution: Cost of goods sold = Beginning inventory + Purchases - Ending inventory Inventory, end is…

Q: Merchandise inventory at the end of the year was understated. Which of the following statements…

A: Merchandise inventory at the end of the year refers to the value of inventory that is available for…

Q: Under the perpetual inventory method, what account is credited when adjusting for the estimated cost…

A: Perpetual inventory system is the system of maintaining the inventory records perpetually throughout…

Q: Merchandise inventory at the end of the year is overstated. Which of the following statements…

A: Merchandise inventory at the end of the year is the closing stock which is reported in the balance…

Q: When using the periodic LIFO inventory cost method, which of the following statements is true? a.The…

A: As per the LIFO method, goods purchased last or most recent purchases would be sold first.   Which…

Q: Allowance Method in accounting for inventory write-down

A: Statement I is correct because Allowance method is required to be followed in accounting for…

Q: The accountant for the Fred Company did not record a purchase of merchandise on credit or include…

A: The question is multiple choice question. Required  Choose the Correct Option.