Which of the following statements is true for a company that uses a periodic inventory system? a.The purchase of inventory requires a debit to Inventory. b.The return of defective inventory requires a debit to Purchase Returns and Allowances. c.The payment of a purchase within the discount period requires a credit to Purchase Discounts. d.Any amounts paid for freight are debited to Inventory.

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: Max Company has chosen to use an allowance account. When the cost of goods sold method is used with…

A: Full form of NRV is Net Realizable Value.

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: The entry to record inventory shrinkage under a perpetual inventory system would include a debit to:…

A: Explanation: When There is Inventory shrinkage Under the perpetual inventory system The following…

Q: Under the periodic inventory system, the journal entry to record the cost of merchandise sold at the…

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

Q: Which of the following statements regarding the cost of transportation-in for the purchase of…

A: Cost of goods sold = Beginning inventory + Purchase of merchandise  + Transportation in - Ending…

Q: the inventory system employing accounting records that continuously disclose the amount of inventory…

A: For the purpose of cost accounting in business, records are being kept for each and every category…

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: 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: In a periodic inventory system, the quantity of ending inventory is determined by: a. Looking at the…

A: Under the periodic inventory method total ending inventory can be calculated by physical count.

Q: 2. The entry to record the return of $25 of inventory to a supplier under the perpetual inventory…

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

Q: How does a company that uses a perpetual inventory system determine the amount of inventory…

A:

Q: hich of the following accounts is unique to a merchandising entity that uses the periodic inventory…

A: The periodic inventory system does not record each transaction at the time they occurred. It…

Q: Which of the following accounts is used in the periodic inventory system but not used in the…

A: Periodic inventory system:   A periodic inventory system is one of the forms of inventory valuation.…

Q: At what amount will the inventory and cost of goods sold amounts be reported on the financial…

A: As per the accounting standards, the closing inventory must be reported at lower of cost or net…

Q: 1. Under the perpetual inventory system, in addition to making the entry to record a sales return, a…

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

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: A company that uses a perpetual inventory system purchased inventory on account and later returned…

A: Under perpetual inventory system, inventory account is used instead of purchases account. For every…

Q: The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a…

A: Definition:   Perpetual and periodic inventory system: In merchandise business, there are two types…

Q: How is merchandise inventory classified on the balance sheet and what is its normal balance of…

A: Merchandise inventory is a current Asset as it is expected to be sold within 12 months from the…

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: 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: 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: 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: When using the periodic inventory system, which of the following generally would not be separately…

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

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: 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: 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: Which of the following methods is appropriate for a business whose inventory consists of a…

A: Note: Since we are entitled to answer only one question, we’ll answer the first question. Please…

Q: The retail inventory method would include which of the following in the calculation of the goods…

A: An accounting method which is being used for the purpose of measuring the merchandise in the store…

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: 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: Assuming that the amount of the physical count of the stock of merchandise is less than the recorded…

A: Perpetual Inventory System:- It is a system where inventory purchases and returns are recorded…

Q: Which of the following items should be included in a company's inventory at the balance sheet date?…

A: Inventory is the current asset which is being held by the entity for the purpose of sale.

Q: Assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the…

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

Q: Which of the following accounts would not appear on a worksheet for a merchandising entity that uses…

A: Periodic inventory system is a system of recording inventory in a way the closing stock is found out…

Q: Under the perpetual inventory system, in addition to making the entry to record a sale, a company…

A: When sales will be made company has to increase cost of goods sold cost and has to reduce inventory…

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: 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: Which of the following accounts would be included in the chart of accounts of a merchandising…

A: Periodic inventory system: The method or system of recording the transactions related to 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: Which of the following is not a step in the retail inventory method process? a.Compute the cost of…

A: The question is based on the concept of Cost Accounting.

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.