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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756
BuyFind

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

Solutions

Chapter
Section
Chapter 14, Problem 1TF
Textbook Problem

Under the periodic inventory system, the beginning inventory is removed from the merchandise inventory account with a credit to Merchandise Inventory and a debit to Income Summary.

Expert Solution
To determine

Identify whether the given statement is true or false.

Answer to Problem 1TF

The given statement “Under the periodic inventory system, the beginning inventory is removed from the merchandise inventory account with a credit to merchandise inventory and a debit to income summary is true.

Explanation of Solution

Periodic inventory system:

The method or system of recording the transactions related to inventory occasionally or periodically are referred to as periodic inventory system.

In periodic inventory system, the adjustment for beginning inventory is done by removing the beginning inventory from the merchandise inventory account by recording the following entry:

DateAccount Titles and ExplanationsDebit ($)Credit ($)
Income Summaryxxx
    Merchandise Inventoryxxx
(To record adjustment for merchandise inventory)

Table (1)

  • Income summary is a component of stockholders’ equity and it is decreased. Therefore, debit income summary account.
  • Merchandise Inventory is a current asset and it is decreased. Therefore, credit merchandise inventory account.

Therefore, from the above explanation, it is observed that, the given statement “Under the periodic inventory system, the beginning inventory is removed from the merchandise inventory account with a credit to merchandise inventory and a debit to income summary is true.

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Chapter 14 Solutions

College Accounting, Chapters 1-27
Show all chapter solutions
Ch. 14 - Prepare the cost of goods sold section for Josephs...Ch. 14 - The Venice Theatre sold and collected cash of...Ch. 14 - Information relating to inventory for Janie Par...Ch. 14 - Using the spreadsheet provided below, prepare the...Ch. 14 - The following information is provided by Koffi...Ch. 14 - A firm is preparing to make adjusting entries at...Ch. 14 - What spreadsheet amounts are used to compute cost...Ch. 14 - Why are both the debit and credit amounts in the...Ch. 14 - What is an unearned revenue?Ch. 14 - Give three examples of unearned revenue.Ch. 14 - List the four steps taken to prepare an...Ch. 14 - Why is it important to make end-of-period...Ch. 14 - A firm is preparing to make adjusting entries at...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - ADJUSTMENT FOR UNEARNED REVENUES USING T ACCOUNTS...Ch. 14 - MERCHANDISE INVENTORY ADJUSTMENTS: PERIODIC...Ch. 14 - DETERMINING THE BEGINNING AND ENDING INVENTORY...Ch. 14 - JOURNALIZE ADJUSTING ENTRIES FOR A MERCHANDISING...Ch. 14 - JOURNAL ENTRIES UNDER THE PERPETUAL INVENTORY...Ch. 14 - ADJUSTMENTS FOR A MERCHANDISING BUSINESS:...Ch. 14 - JOURNALIZE ADJUSTING ENTRY FOR INVENTORY...Ch. 14 - PREPARATION OF ADJUSTMENTS ON A SPREADSHEET FOR A...Ch. 14 - WORKING BACKWARD FROM ADJUSTED TRIAL BALANCE TO...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - ADJUSTMENT FOR UNEARNED REVENUES USING T ACCOUNTS...Ch. 14 - MERCHANDISE INVENTORY ADJUSTMENTS: PERIODIC...Ch. 14 - DETERMINING THE BEGINNING AND ENDING INVENTORY...Ch. 14 - JOURNALIZE ADJUSTING ENTRIES FOR A MERCHANDISING...Ch. 14 - JOURNAL ENTRIES UNDER THE PERPETUAL INVENTORY...Ch. 14 - ADJUSTMENTS FOR A MERCHANDISING BUSINESS:...Ch. 14 - JOURNALIZE ADJUSTING ENTRY FOR INVENTORY...Ch. 14 - PREPARATION OF ADJUSTMENTS ON A SPREADSHEET FOR A...Ch. 14 - WORKING BACKWARD FROM ADJUSTED TRIAL BALANCE TO...Ch. 14 - A friend of yours recently opened Abracadabra, a...Ch. 14 - Jason Tierro, an inventory clerk at Lexmar...Ch. 14 - John Neff owns and operates Waikiki Surf Shop. A...Ch. 14 - Block Foods, a retail grocery store, has agreed to...

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