The entry to record inventory shrinkage under a perpetual inventory system would include a debit to: A Inventory. Inventory Shrinkage Expense. Cost of Merchandise Sold. Sales.

Q: Estimate ending inventory and cost of goods sold using the gross profit method.

A: Under gross profit method, calculation of cost of goods sold: Cost of goods sold = Sales* ( 1 -…

Q: When using a perpetual inventory system, the journal entry to record the cost of goods sold is:…

A: Perpetual inventory system reports the inventory units on regular basis.

Q: Which of the following are characteristics of a perpetual inventory system? (a). Management knows…

A: There were two types of inventory systems to record and maintain inventory.   1. Periodic…

Q: True or False Merchandise inventory is reported in the long-term assets section of the statement of…

A: Long-term assets:                            Long-term assets are those assets called noncurrent…

Q: Merchandise inventory is classified on the balance sheet as a a. current liability b. current…

A: Assets can be classified as current asset and long-term assets. Liabilities can be classified as…

Q: Under a perpetual inventory system, acquisition of merchandise for resale is debited to the…

A: Inventory accountExplanation:Under a perpetual inventory system, acquisition of merchandise for…

Q: 31) What is the Adjusting journal entry to record when merchandise inventory is overstated in the…

A: Merchandise inventory is a form of asset for the company. It should be debited in case of increase…

Q: An account used in the perpetual inventory system that is not used in the periodi inventory system…

A: The main distinction between inventory systems is the goods inventory account.Periodic inventory…

Q: In a periodic inventory system, the cost of merchandise purchased includes the cost of

A: Statement is TRUE  In a periodic inventory system, the cost of merchandise purchased includes the…

Q: What is inventory shrinkage? Describe the adjusting entry that would be recorded to account for…

A: Inventory shrinkage: When there is a difference between inventory as per books and actual inventory…

Q: How is merchandise inventory classified on the balance sheet and what is its normal balance of…

A: Merchandise inventory is a current Asset as it is expected to be sold within 12 months from the…

Q: oods purchased and held for resale are commonly known as _____. perpetual inventoryperiodic…

A: Periodic Inventory System: The periodic inventory system records and updates the inventory at the…

Q: The two main inventory accounting systems are the a. perpetual and periodic. b. purchase and sale.…

A: Purchase and sale are the transaction made by the company. It is not an inventory system. Returns…

Q: What is the name of the account used to record purchases of merchandise inventory?

A: The concept of merchandise inventory is associated with cost of goods that is in hand and available…

Q: When recording a purchase of inventory on credit, which accounts are typically affected? A) Debit…

A: When assets or expenses increases it should be debited and when decreases it should be…

Q: Determine ending inventory by applying the retail inventory method.

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: 126) Using a perpetual inventory system, the sale of inventory on account is recorded with a: B)…

A: Journal Entry :— It is an act of recording transaction in books of account when transaction…

Q: Which of the following is a true statement about inventory systems? A perpetual system determines…

A: The correct statement about inventory systems is:Perpetual inventory systems require more detailed…

Q: (True or false) Under the perpetual inventory system, on a work sheet, cost of sales will be shown…

A: Cost of Sales - Cost of Sales is the cost incurred by the company to earn sales for the…

Q: ic inventory system wants to remove beginning estimated returns inventory, which of the following…

A: The right answer is option a.Estimated Returns Inventory

Q: Define the term inventory shrinkage. How is the amount of inventory shrinkage determined in a…

A: Inventory Shrinkage refers to that amount of inventory which is in excess and listed in the…

Q: Explain how the sale of inventory on account is recorded under a periodic system. How does this…

A:

Q: Under the perpetual inventory system, which of the following accounts is credited in the adjusting…

A: The objective of the question is to identify the correct account that is credited in the adjusting…

Q: Describe the journal entry(ies) when recording a sale of inventory using the periodic inventory…

A: In a periodic Inventory system, the entries are made in the system at the end of the accounting…

Q: Which inventory system records both sales and cost of goods sold at the point of sale? Group of…

A: There are different types of inventory system being used depending the record of pricing and record…

Q: What is the correct entry to write off the inventory under perpetual method? Dr. Cost of Goods sold…

A: The Perpetual Inventory System is a highly preferred system as it can produce accurate results…

Q: In recording the cost of goods sold based on data available from perpetual inventory records, the…

A: The inventory method is allocated into two categories i.e. perpetual inventory system and periodic…

Q: Listed below are selected examples of transactions related to the purchase and sale of inventory…

A: An accounting transaction may be classified in accounting head as asset, liability, expense or…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.