True or False

Q: Where there is a reversal of a previous inventory write-down, the entry would involve a _______to…

A: Inventory is the combination of all the goods which are ready for sale, goods which are in process,…

Q: What is the major difference between a periodic and a perpetual inventory system? Oa. Under the…

A: The question is related to Inventory Management. In Perpetual Inventory system the merchandise…

Q: Explain the steps necessary to calculate and record LIFO Reserve, and consequential Write-Down under…

A: LIFO reserve refers to the inventory method which is defined as the difference among what the ending…

Q: Which one of the following statements is true regarding the cost of sales, if the perpetual…

A: The perpetual inventory system is the company where the company counts and records the inventory on…

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: All sales and purchases for the year at Ross Corporation are credit transactions. Ross uses a…

A:

Q: Which of the following transactions would not result in an adjustment to the inventory account under…

A: Sale of merchandise on cash and credit and merchandise return all includes inventory account but…

Q: Ann M. Martin Company makes the following errors during the current year. (Evaluate each case…

A: Introduction Errors in Inventory will affect Cost of Goods Sold, Gross Profit as well as Net Income.…

Q: A retailer’s physical count of inventory was higher than that shown by the perpetual records.Which…

A: When the physical count of inventory is higher than the accounting records, the reasons would be…

Q: How can we track purchases and sales when we don't know how much inventory we have until the end of…

A: Sales=Units Sold×Selling Price Purchases=Cost of Goods available for sale-Begining Value of…

Q: If a group of inventory items costing $15,000 had been omitted from the year-end inventory count,…

A: The errors in inventory causes overstatement or understatement of inventory. When the ending…

Q: A company using a perpetual inventory system that returns goods previously purchased on credit would…

A: What is perpetual inventory system? It is a system which record the changes in inventory(purchased…

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: Ann M. Martin Company makes the following errors during the current year.    1.   Overstatement of…

A: Assets, liabilities and stockholders' equity are included in the balance sheet of the company.

Q: A list of errors is shown below: Show the effects of the errors on the indicated balance sheet and…

A:

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: Under the perpetual inventory system, the business does not maintain records that show the running…

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

Q: Which one of the following statements is not true? a. A company using the periodic system does not…

A: At the end of the period, there is still a need to match the inventory value with the physical…

Q: What is the effect on net income if a company fails to record a purchase in transit (FOB shipping…

A: Accounting for inventory Inventory is all type of goods and products held by the seller to sell in…

Q: Highlight the differences in the closing process when using the periodic inventory system rather…

A: Definition:

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: A company that uses the periodic inventory system makes the following errors:…

A: Periodic inventory system refers to a method of inventory valuation in which physical count of…

Q: A company using a periodic inventory system neglected to record a purchase of merchandise on account…

A: Understated, No effect

Q: In your own words, discuss the differences between a perpetual and periodic inventory system. Your…

A: Inventory is the current asset posted on the balance sheet of the company.

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: The failure to record a purchase of merchandise on account even though the goods are properly…

A: Error of Omission: It is an  error where  no entry  is being recorded even though  transactions  are…

Q: No entry is made to recognize cost of goods sold when inventory is sold under periodic inventory…

A: Solution: Under periodic inventory system, inventory is not updated with every purchase and sales,…

Q: When the merchandise inventory account provides a running balance of the goods on hand, which…

A: The question is related to Inventory system. There are two methods of Inventory.Perpetual inventory…

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: adjustment to the perpetual inventory records. Give any entry record the final disposition of any…

A: Perpetual inventory system is the system of recording the level of inventory at a continuously means…

Q: Which of the following is false regarding a perpetualinventory system?a. Physical counts are never…

A: Option “a” is the correct answer that is physical counts are never needed because records are…

Q: Under a perpetual inventory system, acquisition of inventory is dented to the purchases account.…

A: Under the perpetual inventory system, Inventory transection is charged through the merchandise…

Q: In Periodic inventory system the goods are a. Not recorded till the time cost of goods are known b.…

A: For calculating the accurate inventory costs and maintaining the appropriate inventory…

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.

Q: If a misstatement of inventory occurs, the net income for-----periods will be misstated

A: The ending inventory affects the income statement and after that ending inventory becomes the…

Q: What can be the effect of inventory errors on the financial reports? How can these errors be…

A: Inventory is the detailed list of items that are present on hand. It constitute of all the finished…

Q: A retail business like Best Buy experiences some loss of inventory due to shoplifting, employee…

A: The inventory difference may occur due to theft, shrinkage, fire, process loss, etc

Q: Explain Potential Misstatements- Inventory/ Cost of Goods Sold and the description of misstatements…

A: Internal control is a procedure for insuring that an organization's objectives in operational…

Q: Explain why errors in the valuation of inventory at the endof the year are sometimes called…

A: The errors in the valuation of ending inventory result in underestimate or overestimate the ending…