Understand and apply rules for measurement of inventory at the end of the reporting period.

Q: Determine the effects of inventory errors on the financial statements.

A: If you understated ending inventory, your cost of goods sold will be overstated by the error amount,…

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Perpetual inventory system: Perpetual Inventory System refers to the inventory system that maintains…

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: By following the LIFO process calculate the Ending inventory value.

A: Introduction: LIFO: LIFO stands for Last in First out. Which means last received inventory to be…

Q: Which function or department below records the decrease in inventory due to a sale? a. warehouse b.…

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: Is an adjusting entry needed for inventory shrinkage when using the periodic inventory system?…

A: Definition:

Q: Indicate the effects of inventory errors on the financial statements

A: Solution- 1-A merchandising company must be sure that it has properly valued its ending inventory.…

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: Record the end of period adjustment to determine the amount of cost of goods sold, including any…

A: The adjustment entry is to be made under periodic inventory system at year end to record cost of…

Q: Before inventory purchases are recorded, the receiving report should be reconciled to what…

A: Inventory refers to the raw materials, work-in process, and the finished goods products that are…

Q: Explain whether the physical inventory should be equal to the amount indicated by the inventory…

A: Solution Concept Perpetual inventory system : The inventory system where the inventory records are…

Q: characteristics of a periodic inventory system, except

A: Characteristics of a periodic inventory system, except (C) INVENTORY RECORD IS ALWAYS UP TO DATE.

Q: At the end of the accounting period, the correct entry in the general journal to adjust for…

A: Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: Regardless of the inventory costing system used, cost of goods available for sale must be allocated…

A: Cost of good available comprises of beginning inventory and purchases during the period and are…

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Given description is:  Requires an adjusting entry to record inventory shrinkage.

Q: What are the main differences between periodic inventory system and perpetual inventory system?…

A:

Q: What are the main differences between periodic inventory system and perpetual inventory system?…

A: Periodic inventory system: A periodic inventory system may be a variety of inventory valuation…

Q: What account is debited when recording the adjusting entry to write down merchandise inventory under…

A: Lower-of-cost-or-market: The lower-of-cost-or-market (LCM) is a method which requires the reporting…

Q: When using the periodic inventory system, which of the following generally would not be separately…

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: What are the purposes of the period-end adjustment under the periodic inventory system?

A: Periodic inventory system:   The method or system of recording the transactions related to…

Q: Under periodic inventory system, at the time of sale of inventory the journal entry for cost of…

A: Periodic Inventory System Basically there are two types of inventory system are there.  One is…

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

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: A periodic inventory system does not continually modify inventory amounts, but instead adjusts for…

A: The inventory under the periodic inventory system does not modify continuously but at the end. The…

Q: When recording purchase returns and purchase allowances under the periodic inventory system, what…

A: Periodic Inventory System:Periodic inventory system is a system in which the inventory is updated…

Q: Explain the types of inventory and the differences between a perpetual inventory system and a…

A:

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

A:

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: Describe the typical approach for recording inventory write-downs.

A: Inventory write-down: As per GAAP (Generally Accepted Accounting Principles), the companies need to…

Q: Describe the accounting treatment for a change in inventory method other than to LIFO.

A: Method of Inventory: Inventory refers to the current assets that a company expects to sell during…

Q: If consignment inventory is unsold at the end of the period, who reports the ending inventory on the…

A: Consignment inventory is a property of consignor and the consignor will have all the rights with…

Q: Explain the accounting treatment of material inventory errors discovered in an accounting period…

A: Materials inventory: Material inventories are the primary materials which are used in the…

Q: Which of the following should be included in inventory on the balance sheet? Goods out on approval…

A: Goods purchased that are in transit F.O.B destination and raw materials will be recorded and…

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Definition: Perpetual inventory: Under the perpetual inventory system, each transaction for the…

Q: Describe the calculation of the cost of goods sold when using the periodic inventory system.

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: Describe the backflushing or post-deduct system of inventory recordkeeping

A: Backflushing is also known as the post-deduct system. When a product is shipped out of stock or used…

Q: why both the "beginning inventory" and "ending inventory" figures both appear on the Income…

A: Periodic inventory system is a inventory system in which all purchase and sale transactions related…

Q: under the system the ending inventory and cost of goods sold are determined at the end of the…

A: Inventory in the business can be maintained through perpetual inventory system or periodic inventory…

Q: Provide a critique of the accounting policy for inventory included in the financial statement in…

A: The accounting standard prescribes the accounting treatment for inventories and sets the guidelines…

Q: In the periodic inventory system, all purchases of merchandise during the period is recorded on what…

A: There are two type of inventory systems in the business. One is perpetual inventory system and other…

Q: Explain the retail inventory method of estimating ending inventory.

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

Q: Briefly contrast the accounting procedures in perpetual andperiodic inventory systems.

A: Following are the differences between accounting procedures in perpetual and periodic inventory…

Q: What are the two journal entries involved when recording the sale of inventory when using the…

A: Perpetual inventory system refers to the inventory system that maintains the detailed records of…

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.