Answer only 55. Why is inventory, end is included inthe computation of net income? *O A. To determine cost of goods sold.B. To determine sales revenueO C. To determine merchandise returnsD. Inventory is not included in thecomputation of net income.

55. Why is inventory, end is included in the computation of net income? * O A. To determine cost of goods sold. O B. To determine sales revenue O C. To determine merchandise returns D. Inventory is not included in the computation of net income.

55. Why is inventory, end is included in the computation of net income? * O A. To determine cost of goods sold. O B. To determine sales revenue O C. To determine merchandise returns D. Inventory is not included in the computation of net income.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 8MC: Which of the following is not included when computing Net Purchases? A. purchase discounts B....

See similar textbooks

Related questions

Q: 8. How do you calculate cost of goods sold on an income statement? A. ČOGS+ Beginning Inventory+…

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

Q: Which account balance is NOT used to compute the cost of goods sold? a.Merchandise Inventory…

A: Formula: Cost of goods sold = Beginning Merchandise inventory + Net Purchases - Ending Merchandise…

Q: Using the lower of cost or market, what should the total inventory value be for the following items:…

Q: For each of the following, indicate whether it would be reported on the balance sheet (B/S),reported…

A: A balance sheet is a financial statement which reports the closing balances of Assets, Liabilities…

Q: What is the effect on net income if a company failed ro record a purchase in transit (FOB shipping…

A: Purchase in transit (FOB shipping point) means that where buyer become the owner of the goods at the…

Q: 4. What are the important factors in using a perpetual inventory system

A: Hi student Since there are multiple questions, we will answer only first question. If you want…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Solution Concepts Purchase account is an expense and if it is understated profit will increase and…

Q: Presented below are the components in determining cost of goods sold. Determine the missing amounts.…

A: Formula: Cost of goods available for sale = Beginning Inventory + Purchases

Q: Which one of the following statements is true regarding the cost of sales, if the perpetual…

A: The perpetual inventory system is the company where the company counts and records the inventory on…

Q: Which of the following statements is correct in the context of the Income Statement prepared by a…

A: The Income Statement is prepared in order to show the result of operating a business for a period of…

Q: Pre b. To determine sales revenue d. Inventory does not affect net income To determine cost of goods…

A: Since you have asked multiple questions, we will solve the first one for you. If you want any…

Q: Total goods available for sale is equal to a. the sum of ending inventory and net purchases. b.…

A: Beginning inventory + Net purchases = Cost of goods sold + Ending inventory Total cost of goods…

Q: What does the debit remainder of the Trade Goods Account show in the perpetual inventory method ?…

A: All the options are explained as under: 1) Cost of available goods: Cost of available goods…

Q: Gross profit , Ending inventory , Cost of goods sold under Lifo.

A: Formula: Gross profit = Sales - cost of goods sold.

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: Fill in the blanks in the following separate income statements a through e. (Amounts to be deducted…

A: Introduction: The Income Statement is a fundamental financial statement that displays a company's…

Q: When inventory is held on consignment it should be? Derecognized Reported as cost of goods sold…

A: Solution: When inventory is held on consignment it should be "Derecognized" as inventory is not…

Q: What type of account is Merchandise Inventory and on which financial statement is it found? Does it…

A: Merchandise inventory means goods or stock that the business has in its books or in its stock. This…

Q: Which of the following accounts is not closed to Income Summary? * O Cost of Goods Sold O…

A: The closing entries are prepared at year end to close the temporary accounts of the business.

Q: Which of the following accounts is not included in inventory? a. Raw material b. Team c. Finished…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 6. Which of the following must be part of the cost of inventory? a. Transportation cost paid for the…

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

Q: Gross profit is calculated as the difference between net sales revenue and ________. A.…

A: Revenue- Revenue refers to the quantity of cash that a corporation actually received during the…

Q: 58. In closing the cost of sales amount and establishing the merchandise ending inventory, the…

A: Answer: concept the journal entry for the cost of sales is cost of goods sold to merchandise…

Q: 2. When Inventory is sold, how is the cost of goods sold account affected? Briefly explain

A: Inventory is an asset which is recorded in the balance sheet . It is the merchandise owned by the…

Q: Which term is applied to the excess of revenue from sales over the cost of merchandise sold? a.net…

A: Income statement: It refers to a financial statement that presents all the income earned by the…

Q: 4. Using the FIFO method, the most recent purchases of inventory are assumed to be contained: a. on…

A: Under FIFO method, units purchased earlier are assumed to be sold first and the ending inventory…

Q: The sum of ending inventory and cost of goods sold isa. net purchases.b. beginning inventory.c. cost…

A: Cost of goods sold is the cost price of the goods at which the goods are sold.

Q: What is the term applied to the excess of revenue from sales over the Cost of Merchandise Sold? a.…

A: Revenue from sales represents the amount of revenue recognized from the sales made during a…

Q: The journal entry to write inventory up to the net realizable value would be _______. a) a debit to…

A: SOLUTION- INVENTORY IS AN ASSET AND TO WRITE UP INVENTORY WE HAVE TO CREDIT THE INVENTORY. AS IT…

Q: When determining gross profit, only the following items must be taken into consideration: A.…

A: Gross Profit is the revenue earned by the company after subtracting the cost associated with earning…

Q: 3.Which of the following transactions would not result in an adjustment to the inventory account…

A: Perpetual inventory system is the one in which the record relating to the inventory is to be…

Q: Presented below are the components in determining cost of goods sold. Determine the missing…

A: Cost of goods sold = Beginning inventory + Purchases - Ending inventory

Q: If the balance in the inventory account is greater than the physical count, which of the following…

A: When inventory is found to be greater than physical count , we need to increase inventory. For…

Q: 26. Which of the following statements is true regarding how cost of goods sold is determined under…

A: A perpetual inventory system records and updates inventory after each transaction.

Q: 8/ Which of the following term is referred as the inventory cost to the seller of the goods sold to…

A: Inventory is the resource held by the entity for the purpose of selling and earning revenues.

Q: 1. What is the effect on net income if a company fails to record a purchase in transit (FOB shipping…

A: Net income refers to the income which is calculated by deducting cost of goods sold, expenses,…

Q: How would the following transactions affect the current ratio and the acid-test ratio? (a) Purchase…

A: Current ratio is the ratio between the current assets and current liabilities. It shows the…

Q: cost of merchandise sold? S What is the term applied to the eXcess of net revenue from sales over…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Cost of goods sold (COGS)- The cost incurred on the goods sold during the period is referred to as…

Q: 1. Under the periodic inventory system, Cost of Goods Sold is treated as an account. 2. Goods should…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Question

Answer only

55. Why is inventory, end is included in
the computation of net income? *
O A. To determine cost of goods sold.
B. To determine sales revenue
O C. To determine merchandise returns
D. Inventory is not included in the
computation of net income.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

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

Which of these statements is false? A. If cost of goods sold is incorrect, ending inventory is usually incorrect too. B. C. D.
What does an increase in inventory imply? How would this increase in inventory be reported under the indirect method?
Identify items missing in determining cost of goods sold For (a) through (e), identify the items designated by X and Y. A. Purchases (X + Y) = Net purchases B. Net purchases + X = Cost of inventory purchased C. Inventory (beginning) + Cost of inventory purchased = X D. Inventory available for sale X = Cost of inventory before estimated returns E. Cost of goods sold before estimated returns X = Cost of goods sold
The difference between merchandise available for sale and the end-of-period merchandise inventory is called (a) gross profit. (b) net purchases. (c) net sales. (d) cost of goods sold.
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 statement
Which of the following is not an element of the financial statements? A. future potential sales price of inventory B. assets C. liabilities D. equity
Which of the following is true about the Sales Returns and Allowances account? a. It is used to record the sale of merchandise. b. It is used to record the reduction of inventory. c. It is a contra account, deducted from sales. d. It is used to record discounts for prompt payment. e. None of the above.
Which of the following is not included when computing Net Purchases? A. purchase discounts B. beginning inventory C. purchase returns D. purchase allowances
Which of the following is an example of a contra revenue account? A. sales B. merchandise inventory C. sales discounts D. accounts payable
1. Which of the following accounts is not included in inventory? a. Raw material b. Team c. Finished goods d. Materials 2. Why is inventory included in the net income determination? a. To determine the cost of goods sold b. To determine sales income c. To determine the return of merchandise d. Inventory is not included in the determination of net income 3. Which of the following is a feature of the perpetual inventory system? a. Inventory purchases are debited to the Purchasing account. b. Inventory records are not kept for every item. c. The cost of what is sold is recorded in each sale. d. The cost of goods sold is determined as the quantity of purchases minus the change in inventory.
40) The difference between Net sales and Cost of goods sold is referred as _____________. a. Gross profit b. Income statement c. Balance sheet d. Inventory
1.Which of the following may not result to the amount of cost of sales? a.Net purchases less net increase in inventory b.Net decrease in inventory plus net purchases c.Total goods available for sale less beginning inventory d.Total goods available for sale less ending inventory