The two main inventory accounting systems are the Perpetual and periodic. purchase and sale. returns and allowances. cash and accrual.

Q: In which financial statement is the inventory account balance presented?

A: In general there are Four Major components of financial statements a) Balance Sheet  b) Profit and…

Q: Under a perpetual inventory system, what are the four inventory costing methods and how does each…

A: The four inventory costing methods are: Specific identification FIFO (First-In, First-Out), LIFO…

Q: Under a perpetual inventory system  accounting records continuously disclose the amount of…

A: The inventory valuation method used to evaluate the closing inventory and cost of goods sold on the…

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Perpetual inventory system: Perpetual Inventory System refers to the inventory system that maintains…

Q: What is the effect of an entry to record the purchase of inventory on account under the perpetual…

A: Under the perpetual inventory system, purchases are directly debited to the "Inventory account". And…

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 is inventory shrinkage? Describe the adjusting entry that would be recorded to account for…

A: Inventory shrinkage: When there is a difference between inventory as per books and actual inventory…

Q: Which inventory system maintains a running record of inventory on hand, purchased,and sold?a.…

A: Answer:   Option d

Q: What account is debited when recording a purchase of inventory when using the perpetual inventory…

A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…

Q: Before inventory purchases are recorded, the receiving report should be reconciled to what…

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

Q: Under periodic inventory system, when there is purchase return then: Inventory will be debited…

A: Answer  A periodic inventory system only updates the closing inventory balance in the general ledger…

Q: Explain whether the physical inventory should be equal to the amount indicated by the inventory…

A: Solution Concept Perpetual inventory system : The inventory system where the inventory records are…

Q: Discuss and explain the major uses of the gross profit method of inventory estimation.

A: Generally  we get gross profit  after trading a/c prepared it means after net sales  minus net…

Q: The journal entry to record the return of inventory purchased on credit under a periodic inventory…

A: One of the main feature of periodic system of inventory is all the adjustments are made at end of…

Q: Differentiate between perpetual and periodic Inventory system.

A: Under the perpetual inventory system, every single movement of the inventory traces as and when they…

Q: How can we prepare financial statements for a company using periodic inventory system?

A: To calculate or account inventory there is two method, perpetual and periodic inventory method. In…

Q: Describe the integration of the Inventory Ledger with the Payables, Receivables and General Ledgers.…

A:

Q: The two main inventory accounting systems are the a. perpetual and periodic. b. purchase and sale.…

A: Purchase and sale are the transaction made by the company. It is not an inventory system. Returns…

Q: When merchandise purchased on account is returned under the perpetual inventory system, the buyer…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Define the term inventory shrinkage. How is the amount of inventory shrinkage determined in a…

A: Inventory Shrinkage refers to that amount of inventory which is in excess and listed in the…

Q: When recording purchase returns and purchase allowances under the periodic inventory system, what…

A: Periodic Inventory System:Periodic inventory system is a system in which the inventory is updated…

Q: Explain the types of inventory and the differences between a perpetual inventory system and a…

A:

Q: Explain how the sale of inventory on account is recorded under a periodic system. How does this…

A:

Q: Assuming that a perpetual inventory system is used, determine the cost of goods sold and the ending…

A: Inventory valuation refers to the methods used by the company to determine the value of its…

Q: Based on the information, Determine the adjusted balances of Inventory,Accounts…

A: Adjusted balance can be defined as those amount of balance determined after the closure of books. It…

Q: A perpetual inventory system will always give updated balances for: Goods Available for Sale and…

A: Perpetual inventory system is a type of inventory system in which all transactions related to…

Q: Under a perpetual inventory system, what are the four inventory costing methods and how does each…

A: Definition:

Q: Describe the integration of the Inventory Ledger with the Payables, Receivables and General Ledgers.

A: Solution:- Introduction:- An integrated accounting system is application software in which all the…

Q: Merchandise inventory is * reported under the classification of O Property, Plant, and Equipment on…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: Under periodic inventory system, freight-in on merchandise purchases should be charged to the *…

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

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Definition: Perpetual inventory: Under the perpetual inventory system, each transaction for the…

Q: Describe the calculation of the cost of goods sold when using the periodic inventory system.

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: Describe the backflushing or post-deduct system of inventory recordkeeping

A: Backflushing is also known as the post-deduct system. When a product is shipped out of stock or used…

Q: Under this inventory system, the “Inventory” account is updated each time a purchase or sale is…

A: Solution: Under perpetual inventory system, inventory is updated with every purchase and sale. Cost…

Q: why both the "beginning inventory" and "ending inventory" figures both appear on the Income…

A: Periodic inventory system is a inventory system in which all purchase and sale transactions related…

Q: If each purchase and sale of merchandise is recorded in the inventory and the cost of merchandise…

A: Under periodic inventory, no cost of goods sold is entry is recorded for every sale transaction. At…

Q: Merchandise inventory is reported under the classification of O Property, Plant, and Equipment on…

A: Merchandise inventory valuation done as per IAS-2

Q: 1. Before inventory purchases are recorded, the receiving report should be reconciled to what…

A: Inventory: Inventory refers to the raw materials, work in progress, and finished goods that are held…

Q: Provide a critique of the accounting policy for inventory included in the financial statement in…

A: The accounting standard prescribes the accounting treatment for inventories and sets the guidelines…

Q: Describe the recording process for purchases of merchandise inventory using a Perpetual inventory…

A: Under perpetual inventory system, changes in merchandise inventory account are recorded after each…

Q: when taking inventory all merchandise held on consignment is _______

A: In a contract of consignment, there are two parties in which one is consignor and consignee.…

Q: Which of the following best describes the activities of the accounting function? a. inventory…

A:

Q: What are the two journal entries involved when recording the sale of inventory when using the…

A: Perpetual inventory system refers to the inventory system that maintains the detailed records 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.