FUNDAMENTALS OF FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781260664386
Author: PHILLIPS, LIBB
Publisher: MCG
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Textbook Question
Chapter 7, Problem 4ME
Reporting Inventory-Related Accounts in the Financial Statements
For each of the following, indicate whether it would be reported on the
_________a. Sales Revenue
_________b. Inventory (held on consignment)
________c. Cost of Goods Sold
________d. Inventory (out on consignment)
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For each of the following, indicate whether it would be reported on the balance sheet (B/S),reported on the income statement (I/S), or not shown in the company’s financial statements (Not)._____ a. Sales Revenue_____ b. Inventory (held on consignment)_____ c. Cost of Goods Sold_____ d. Inventory (out on consignment)
Inventory is recorded in the statement of financial position of an entity. What king of inventory is recorded in the statement of financial position
opening inventory
closing inventory
average of the opening and closing inventory
higher of the opening or closing inventory
the inventory system employing accounting records that continuously disclose the amount of inventory is called
a.retail
b.periodic
c.physical
d.perpetual
Chapter 7 Solutions
FUNDAMENTALS OF FINANCIAL ACCOUNTING
Ch. 7 - What are three goals of inventory management?Ch. 7 - Describe the specific types of inventory reported...Ch. 7 - The chapter discussed four inventory costing...Ch. 7 - Which inventory cost flow method is most similar...Ch. 7 - Where possible, the inventory costing method...Ch. 7 - Contrast the effects of LIFO versus FIFO on ending...Ch. 7 - Contrast the income statement effect of LIFO...Ch. 7 - Several managers in your company are experiencing...Ch. 7 - Explain briefly the application of the LCM rule to...Ch. 7 - Prob. 10Q
Ch. 7 - You work for a made-to-order clothing company,...Ch. 7 - Prob. 12QCh. 7 - (Supplement 7B) Explain why an error in ending...Ch. 7 - Which of the following statements are true...Ch. 7 - The inventory costing method selected by a company...Ch. 7 - Which of the following is not a name for a...Ch. 7 - Which of the following correctly expresses the...Ch. 7 - A New York bridal dress designer that makes...Ch. 7 - If costs are rising, which of the following will...Ch. 7 - Which inventory method provides a better matching...Ch. 7 - Which of the following regarding the lower of cost...Ch. 7 - An increasing inventory turnover ratio a....Ch. 7 - In which of the following situations is an LCM/NRV...Ch. 7 - Matching Inventory Items to Type of Business Match...Ch. 7 - Reporting Goods in Transit Abercrombie Fitch Co....Ch. 7 - Prob. 3MECh. 7 - Reporting Inventory-Related Accounts in the...Ch. 7 - Matching Financial Statement Effects to Inventory...Ch. 7 - Matching Inventory Costing Method Choices to...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Prob. 10MECh. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Reporting Inventory under Lower of Cost or...Ch. 7 - Preparing the Journal Entry to Record Lower of...Ch. 7 - Determining the Effects of Inventory Management...Ch. 7 - Interpreting LCM Financial Statement Note...Ch. 7 - Calculating the Inventory Turnover Ratio and Days...Ch. 7 - Prob. 19MECh. 7 - Prob. 20MECh. 7 - Prob. 21MECh. 7 - (Supplement 7A) Calculating Cost of Goods Sold and...Ch. 7 - (Supplement 7B) Determining the Financial...Ch. 7 - Prob. 24MECh. 7 - Reporting Goods in Transit and Consignment...Ch. 7 - Determining the Correct Inventory Balance Seemore...Ch. 7 - Determining the Correct Inventory Balance Seemore...Ch. 7 - Calculating Cost of Ending Inventory and Cost of...Ch. 7 - Calculating Cost of Ending Inventory and Cost of...Ch. 7 - Prob. 6ECh. 7 - Analyzing and Interpreting the Financial Statement...Ch. 7 - Evaluating the Effects of Inventory Methods on...Ch. 7 - Choosing LIFO versus FIFO When Costs Are Rising...Ch. 7 - Using FIFO for Multiproduct Inventory Transactions...Ch. 7 - Reporting Inventory at Lower of Cost or Market/Net...Ch. 7 - Reporting Inventory at Lower of Cost or Market/Net...Ch. 7 - Analyzing and Interpreting the Inventory Turnover...Ch. 7 - Analyzing and Interpreting the Effects of the...Ch. 7 - Prob. 15ECh. 7 - Analyzing and Interpreting the Financial Statement...Ch. 7 - Prob. 17ECh. 7 - Analyzing the Effects of Four Alternative...Ch. 7 - Evaluating the Income Statement and Income Tax...Ch. 7 - Calculating and Interpreting the Inventory...Ch. 7 - Prob. 4CPCh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Analyzing the Effects of Four Alternative...Ch. 7 - Evaluating the Income Statement and Income Tax...Ch. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - Prob. 3PBCh. 7 - Prob. 4PBCh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Prob. 1COPCh. 7 - (Supplement 7A) Recording Inventory Transactions,...Ch. 7 - (Supplement 7A) Recording Inventory Purchases,...Ch. 7 - (Supplement 7A) Recording Inventory Purchases,...Ch. 7 - Prob. 5COPCh. 7 - Prob. 6COPCh. 7 - Prob. 7COPCh. 7 - Prob. 8COPCh. 7 - Prob. 9COPCh. 7 - Prob. 10COPCh. 7 - Prob. 11COPCh. 7 - Prob. 12COPCh. 7 - Prob. 1SDCCh. 7 - Prob. 2SDCCh. 7 - Critical Thinking: Income Manipulation under the...Ch. 7 - Accounting for Changing Inventory Costs In...
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- On which financial statement would the merchandise inventory account appear? A. balance sheet B. income statement C. both balance sheet and income statement D. neither balance sheet nor income statementarrow_forwardDescribe the entry to adjust from cost to net realizable value for inventory write-downs. What effects does this adjustment have on (a) assets, (b) liabilities, (c) stockholders’ equity (or retained earnings), (d) revenues, (e) expenses, and (f) net income?arrow_forwardThe cost of inventory sold during the current year is classified as aln) in the O Liability, Balance sheet O Asset; Balance sheet O Revenue; Income statement O Expense; Income statementarrow_forward
- The inventory costing method selected by a company canaffecta. The balance sheet.b. The income statement.c. The statement of retained earnings.d. All of the above.arrow_forwardMerchandise inventory is classified on the balance sheet as a a. current liability b. current asset c. long-term asset d. long-term liabilityarrow_forwardMerchandise inventory is * reported under the classification of O Property, Plant, and Equipment on the balance sheet. often reported as a miscellaneous expense on the income statement. reported as a current asset on the balance sheet. generally valued at the price for which the goods can be sold.arrow_forward
- Under the periodic inventory system, which of the following accounts is debited when inventory is purchased? a.Purchases b.Accounts Payable c.Accounts Receivable d.Merchandise Inventoryarrow_forwardMatch the accounting terminology to the definitions. A(Click the icon to view the definitions.) More Info - X Term Definition 1. Cost of Goods Sold 2. Perpetual inventory system An inventory system that requires businesses to obtain a physical count of inventory to а. 3. Vendor determine quantities on hand. 4. Periodic inventory system Expenses, other than Cost of Goods Sold, that are incurred in the entity's major b. 5. Operating expenses ongoing operations. 6. Gross profit Excess of Net Sales Revenue over Cost of Goods Sold C. d. The cost of merchandise inventory that the business has sold to customers. The individual or business from whom a company purchases goods. е. f. An inventory system that keeps a running computerized record of merchandise inventory Print Donearrow_forwardWhich inventory system maintains a running record of inventory on hand, purchased,and sold?a. Accruedb. Periodicc. Consignedd. Perpetualarrow_forward
- Which document triggers the update of the inventory subsidiary ledger? a. bill of lading b. stock release c. sales order d. shipping noticearrow_forwardIf the net realizable of an entity's inventories is less than its cost, the entry to adjust the balance of the inventory assuming the entity uses the allowance method will involve a A. Debit to inventory B. Debit to loss on inventory write-down C. Credit to inventory. D. Credit to loss on inventory write-downarrow_forwardTrue or False Merchandise inventory is reported in the long-term assets section of the statement of financial position.arrow_forward
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