When there are no inventory at the beginning or at the end of the period, the total purchases will be: A equal to gross profit. B equal to cost of sales. impossible to determine. equal to net sales.

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: If ending inventory is understaffed for year 1, then in year 2…. A. Costa of goods sold and gross…

A: Inventory is the term used in accounting which refers to the goods as well as materials that the…

Q: Under the LIFO cost flow assumption during a period ofinflation, which of the following is false? A.…

A: Inflation and cost of goods sold - a company selling goods during periods of inflation will see an…

Q: der the periodic inventory system, all increases and decreases in inventory, such as purchases,…

A: Solution: False.  Under periodic inventory system Daily inventory records are not maintained.

Q: A company records inventory at gross invoice price. Theoretically, how should the following affect…

A: Solution: Interest on inventory loan do not affect cost of inventory, it is working capital loan…

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: (True or False) Cost of sales, under the periodic system, is calculated as inventory at start (plus…

A: Periodic Inventory System - Under periodic inventory system cost of goods sold will be calculated at…

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: Total goods available for sale is equal to  a. the sum of ending inventory and net purchases. b.…

A: Beginning inventory + Net purchases = Cost of goods sold + Ending inventory Total cost of goods…

Q: Compared to using the FIFO method to account for inventory, during periods of risingprices, a…

A: USING OF LIFO METHOD

Q: Which of the following statements is incorrect? Group of answer choices A)Ending inventory exceeds…

A: a) Cost of goods sold= Opening inventory + Purchases - Ending inventory Lets take a example…

Q: A company's inventory cost was lower in FIFO than it would have been using LIFO. Assuming no…

A: Inventory is the stock of goods with the company which is ready to sell out. It covers large…

Q: If the inventory is valued at cost and the price level is steadily increasing, which type of…

A: Under FIFO, goods that are purchased initially are sold first, however, under LIFO it is assumed…

Q: Under the lower of cost or market inventory valuation rule, market value of inventory is defined as:…

A: Market value is the price of an item/product prevailing in the market on the given date.

Q: Which of the following statements is incorrect?

A: Cost of Goods Sold: Cost of Goods sold is the Cost of the items that are sold it is calculated for…

Q: gross profit method assumes

A: The gross profit technique calculates the value of inventory by combining current period data on net…

Q: Which of the following is not a characteristic of a perpetual inventory system? O Cost of goods sold…

A: Here in this question we are required to answer which of the characteristics is not of perpetual…

Q: If beginning inventory is understated by $980O, the effect of this error in the current period is…

A: The COGS is determined based on beginning inventory, inventory purchase, and closing inventory. COGS…

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: Cost of goods sold is equal to a. total goods available for sale minus ending inventory. b. total…

A: Formula: Cost of goods available for sale = Beginning inventory + net purchases

Q: Under which method of inventory valuation, the average price used for valuation of goods issued is…

A: Inventory is the material in which the business deal. It is a very important component of company…

Q: If purchases were recorded correctly but ending physical inventory is understated, which one of the…

A: Working capital, conjointly referred to as web assets (NWC), is that the distinction between a…

Q: Under the perpetual inventory system, cost of goods sold is debited when inventory is sold and…

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

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: The gross profit method and retail inventory method C Are both estimates of ending inventory and…

A: In company, there is a requirement of valuation of the inventory to find out the cost of the goods…

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: Assume that a firm separately determined inventory under FIFO and LIFO and then compared the…

A: FIFO is a method of costing inventory in which the inventory purchased first is out first for…

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: Which of the following is incorrect about the perpetual inventory method? a. purchases are…

A: Perpetual inventory method : Perpetual inventory method records real time transactions of inventory…

Q: The process of recording inventory that gives a lower cost of a commodity sold in an income…

A: The inventory can be valued using various methods as LIFO, FIFO and average method.

Q: Which of the following may not result to the amount of cost of sales? a.Net purchases less net…

A: Solution- COGS can be calculated in three steps that culminate in one formula.   Or, to put it…

Q: 1) If the ending inventory is to be valued at approximately lower-of-cost-or-net realizable value,…

A: Cost to retail ratio may be defined as the division of cost of goods available for sale and retail…

Q: What is the effect on the cost of goods sold, gross profit, and net income if ending merchandise…

A: Ending inventory is the value of inventory available on hand at the end of the accounting period.

Q: amount of cost of sales?

A: (Note: Since you have posted multiple questions, we will solve the first question for you. For the…

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: 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: Which of the following regarding the lower of cost ormarket rule for inventory are true?(i) The…

A: Option c is correct.

Q: The cost of goods sold is based on the oldest purchases under which method of calculating inventory…

A: Solution: There are various methods of inventory valuation. These are FIFO, LIFO, Average cost…

Q: If ending inventory in Period 1 is​ overstated, gross profit in Period 2​ is

A: The correct answer is Understated.

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

A: Cost of goods sold (COGS)- The cost incurred on the goods sold during the period is referred to as…

Q: Petco Inc. uses the periodic inventory system. Assess the effect on net income of including goods in…

A: Not including the fob shipping purchases in the ending inventory will understate the ending…

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.