INT. ACCOUNTING<CUSTOM>W/CONNECT 2-YEA
8th Edition
ISBN: 9781259767074
Author: SPICELAND
Publisher: MCG CUSTOM
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Textbook Question
Chapter 8, Problem 8.26E
Concepts; terminology
• LO8–1 through LO8–5
Listed below are several terms and phrases associated with inventory measurement. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.
List A | List B |
________ 1. Perpetual inventory system | a. Legal title passes when goods are delivered to common carrier. |
________ 2. Periodic inventory system | b. Goods are transferred to another company but title remains with transferor. |
________ 3. F.o.b. shipping point | c. Purchase discounts not taken are included in inventory cost. |
________ 4. Gross method | d. If LIFO is used for taxes, it must be used for financial reporting. |
________ 5. Net method | e. Assumes items sold are those acquired first. |
________ 6. Cost index | f. Assumes items sold are those acquired last. |
________ 7. F.o.b. destination | g. Purchase discounts not taken are considered interest expense. |
________ 8. FIFO | h. Used to convert ending inventory at year-end cost to base year cost. |
________ 9. LIFO | i. Continuously records changes in inventory. |
________ 10. Consignment | j. Assumes items sold come from a mixture of goods acquired during the period. |
________ 11. Average cost | k. Legal title passes when goods arrive at location. |
________ 12. IRS conformity rule | l. Adjusts inventory at the end of the period. |
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H7.
For the same transactions, why does the weighted-average cost method provide different value for ending inventory and COGS depending on whether the periodic or perpetual inventory system is used?
Select one: a. Perpetual inventory calculates and assigns costs as items are sold, while periodic inventory calculates and assigns costs at the end of the period.
b. Perpetual inventory calculates and assigns costs at the end of the period, while periodic inventory calculates and assigns costs as items are sold.
c. Perpetual inventory counts all the purchases for the month first before calculating the average cost, while periodic calculates the average cost after every transaction.
d. Perpetual inventory and periodic inventory will not provide different values using
Explain also wrong options and explain with details
May I ask for an explanation and solution to the question for a better understanding. Thank you!
15. What is Sculler's inventory turnover?
a. 1.143
b. 1.250
c. 1.429
d. 1.667
10.Which of the following statement(s) is (are) true about the perpetual system.A. Physical count is unnecessary for the perpetual system.B. The inventory account is used to record purchase returns and discounts.C. The system uses individual subsidiary ledgers for each inventory items.D. A formula is needed to compute for the cost of goods sold.E. The cost of sales account is debited at cost when goods are sold.
A, B and C
B, C and E
C, D and E
D, E and C
Chapter 8 Solutions
INT. ACCOUNTING<CUSTOM>W/CONNECT 2-YEA
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - Q 8–4
The Bockner Company shipped merchandise to...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - Prob. 8.3BECh. 8 - Prob. 8.4BECh. 8 - Prob. 8.5BECh. 8 - Prob. 8.6BECh. 8 - Prob. 8.7BECh. 8 - Prob. 8.8BECh. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - Prob. 8.10BECh. 8 - Prob. 8.11BECh. 8 - Prob. 8.12BECh. 8 - Prob. 8.13BECh. 8 - Prob. 8.1ECh. 8 - Prob. 8.2ECh. 8 - Prob. 8.3ECh. 8 - Prob. 8.4ECh. 8 - Prob. 8.6ECh. 8 - Prob. 8.7ECh. 8 - Physical quantities and costs included in...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.11ECh. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - E 8–19
LIFO liquidation
LO8–1, LO8–4, LO8–6
The...Ch. 8 - Prob. 8.23ECh. 8 - Prob. 8.24ECh. 8 - Prob. 8.25ECh. 8 - Concepts; terminology LO81 through LO85 Listed...Ch. 8 - Prob. 1CPACh. 8 - Prob. 2CPACh. 8 - Prob. 3CPACh. 8 - Prob. 4CPACh. 8 - Prob. 5CPACh. 8 - Prob. 6CPACh. 8 - Prob. 7CPACh. 8 - Prob. 8CPACh. 8 - Prob. 1CMACh. 8 - Prob. 2CMACh. 8 - Prob. 3CMACh. 8 - Prob. 8.1PCh. 8 - P 8–2
Items to be included in inventory
LO8–2
The...Ch. 8 - Prob. 8.4PCh. 8 - Prob. 8.5PCh. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Prob. 8.12PCh. 8 - Prob. 8.13PCh. 8 - Prob. 8.14PCh. 8 - Prob. 8.15PCh. 8 - Prob. 8.1BYPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Prob. 8.3BYPCh. 8 - Prob. 8.4BYPCh. 8 - Prob. 8.5BYPCh. 8 - Prob. 8.6BYPCh. 8 - Prob. 8.7BYPCh. 8 - Prob. 8.8BYPCh. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Prob. 8.10BYPCh. 8 - Research Case 8–11
FASB codification; locate and...Ch. 8 - Analysis Case 8–13
Costs included in inventory;...Ch. 8 - Prob. 1AFKC
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Our narrative and DFDs are created assuming that accounts payable result from the purchase of inventory using a perpetual inventory system. However, inventory is not the only item that a company might purchase. For each of the following situations, show the journal entry (in debit/credit journal entry format with no dollar amounts) that would result when the accounts payable was created. Make and state any assumptions you think are necessary. Situations: 1. Merchandise is purchased, and a periodic inventory process is used. 2. Merchandise is purchased, and a perpetual inventory process is used. 3. Office supplies are purchased. 4. Plant assets are purchased. 5. Legal services are purchased.arrow_forwardLO2 Under the perpetual system of accounting for inventory, the current merchandise inventory and the cost of goods sold are not determined until the end of the accounting period when a physical inventory is taken.arrow_forward( Appendix 6B) For each inventory costing method, perpetual and periodic systems yield the same amounts for ending inventory and cost of goods sold. Do you agree or disagree with this statement? Explain.arrow_forward
- ( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory system, what is the cost of goods sold under FIFO at April 30? a. $32,800 b. $38,400 c. $63,600 d. $69,200arrow_forward( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory system, what is the cost of ending inventory under LIFO at April 30? a. $32,800 b. $38,400 c. $63,600 d. $69,200arrow_forwardPARRISH MODULE 5 INVENTORY-DIFFERENCES Please explain the differences between the following transactions. Both involve reduction in price of imperfect inventory but different accounts are used. In Transaction 2 the Periodic and Perpetual Method accounts used are exactly the same. Would you please explain, point out the differences and why they are recorded differently. Transaction 1. Reduction in price of imperfect inventory for $10 Periodic Method Accounts Payable or Cash 10 Purchase Allowances 10 Perpetual Method Accounts Payable or Cash 10 Inventory 10 Transaction 2. Reduction in price of imperfect items sold for $53; reduction allowed is $25 Periodic Method Sales Allowances 25 Accounts Payable or Cash 25 Perpetual Method Sales Allowances 25 Accounts Payable or Cash 25arrow_forward
- 20) Under a perpetual inventory system, inventory shrinkage and lost or stolen goods are more readily determined.arrow_forward63. According to the GAM for NGAs, this shall be used for large numbers of items of inventory that are ordinarily interchangeable Specific Identification FIFO Weighted average cost applied in a periodic inventory system Weighted average cost applied in a perpetual inventory system Any of these as a matter of accounting policy choicearrow_forward
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