Merchandise inventory is classified on the balance sheet as aa. current assetb. long-term assetc. current liabilityd. long-term liability


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The inventory system employing accounting records that continuously disclose the amount of inventory is calleda. perpetualb. physicalc. retaild. periodic
Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes aa. debit to Cashb. credit to Customer Refunds Payablec. debit to Merchandise Inventoryd. credit to Merchandise Inventory
The arrangements between buyer and seller as to when payments for merchandise are to be made are calleda. cash on demandb. credit termsc. gross cashd. net cash
Which of the following accounts has a normal credit balance?a. Merchandise Inventoryb. Delivery Expensec. Accounts Receivabled. Sales
Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes aa. credit to Accounts Payableb. credit to Merchandise Inventoryc. debit to Cost of Merchandise Soldd. credit to Sales
The amount of the total cash paid to the seller for merchandise purchased for consumption would normally includea. the list price plus the sales taxb. only the list pricec. only the sales taxd. the list price less the sales tax
If the seller is to pay the freight costs of delivering merchandise, the delivery terms are stated asa. FOB shipping pointb. FOB sellerc. FOB n/30d. FOB destination
Taking advantage of a 2/10, n/30 purchases discount is equal to a yearly savings rate of approximatelya. 36%b. 24%c. 2%d. 20%
Who is responsible for the freight cost when the terms are FOB destination?a. either the buyer or the sellerb. the customerc. the buyerd. the seller
Under a perpetual inventory system, the amount of each type of merchandise on hand is available in thea. purchase ledgerb. customer"s ledgerc. inventory ledgerd. creditor"s ledger
The primary objectives of control over inventory area. reporting inventory in the financial statements and taking a physical inventoryb. safeguarding the inventory from damage and maintaining constant observation of the inventoryc. safeguarding inventory from damage and reporting inventory in the financial statementsd. maintaining constant observation of the inventory and reporting inventory in the financial statements
Control of inventory should begin as soon as the inventory is ordered. Which of the following internal control steps is not done to meet this goal?a. check the invoice to the receiving reportb. check the invoice to the purchase orderc. check the invoice with the person who specifically purchased the itemd. check the invoice for mathematical accuracy
Which document establishes an initial record of the receipt of inventory?a. receiving reportb. vendor"s invoicec. purchase orderd. petty cash voucher
When merchandise sold is assumed to be in the order in which the purchases were made, the company is using
When using a perpetual inventory system, the journal entry to record the Cost of Merchandise Sold is
Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Date Blankets Units CostMay 3 Purchase 5 $2010 Sale 3 17 Purchase 10 2420 Sale 6 23 Sale 3 30 Purchase 10 30Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the LIFO inventory cost method.
Cost of Merchandise Sold for Sale of May 20 Using LIFO = 6 units (at $24 from May 17 purchase) = $144
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Intermediate Accounting, Binder Ready Version16th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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