Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 4, Problem 16QS
Summary Introduction
Concept introduction:
Inventory records can be maintained using perpetual or periodic inventory systems. Under the perpetual inventory system, the inventory records are maintained on a real-time basis after every inventory transaction. Under the periodic inventory system, the inventory records are updated at the end of a particular period.
To indicate: the type of inventory system that best matches with the given statement.
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Students have asked these similar questions
Identify whether each description best applies to a periodic or a
perpetual inventory system.
Provides more timely information to managers.
Choose. +
Updates the inventory account only at period-end.
Choose. +
Requires an adjusting entry to record inventory shrinkage.
Choose.
Returns immediately affect the account balance of Merchandise Inventory
Choose. +
Records cost of goods sold each time a sales transaction occurs.
Choose. +
Which of the following is an advantage of the periodic inventory system?A. frequent physical inventory countsB. cost prohibitiveC. time consumingD. real-time information for managers
Accountants at UltraTech obtain their values for inventory and total assets, calculate the balance sheet percentage by dividing inventory by total assets for each year and summarize the observations for the relative size of inventory to total assets for each year and percentage change from year-to-year. This would allow them to effectively assess:
a. Inventory control compared to competitorsb. If there is an effective return on assetsc. If inventory is being properly managedd. How they are managing liabilities
Chapter 4 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
Ch. 4 - Prob. 1DQCh. 4 - In comparing the accounts of a merchandising...Ch. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - How does a company that uses a perpetual inventory...Ch. 4 - Distinguish between cash discounts and trade...Ch. 4 - What is the difference between a sales discount...Ch. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 10DQ
Ch. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Refer to the income statement for Samsung in...Ch. 4 - Refer to the income statement of Samsung in...Ch. 4 - Buyers negotiate purchase contracts with...Ch. 4 - Enter the letter for each term in the blank space...Ch. 4 - Prob. 2QSCh. 4 - Use the following information (in random order)...Ch. 4 - Compute the amount to be paid for each of the four...Ch. 4 - Prepare journal entries to record each of the...Ch. 4 - Prob. 6QSCh. 4 - Prepare journal entries to record each of the...Ch. 4 - Prob. 8QSCh. 4 - Prob. 9QSCh. 4 - Prob. 10QSCh. 4 - Prob. 11QSCh. 4 - Prob. 12QSCh. 4 - Prob. 13QSCh. 4 - Prob. 14QSCh. 4 - Prob. 15QSCh. 4 - Prob. 16QSCh. 4 - Prob. 17QSCh. 4 - Prob. 18QSCh. 4 - Prob. 19QSCh. 4 - Prob. 21QSCh. 4 - Prob. 22QSCh. 4 - Prob. 24QSCh. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Prob. 10ECh. 4 - Prob. 11ECh. 4 - A retailer completed a physical count of ending...Ch. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Prob. 15ECh. 4 - Prob. 16ECh. 4 - Prob. 17ECh. 4 - Prob. 18ECh. 4 - Prob. 19ECh. 4 - Prob. 20ECh. 4 - Prob. 21ECh. 4 - Lopez Company reports unadjusted first-year...Ch. 4 - Prob. 23ECh. 4 - Piere Imports uses the perpetual system in...Ch. 4 - Prob. 25ECh. 4 - Prob. 1PSACh. 4 - Prepare journal entries to record the following...Ch. 4 - Prob. 3PSACh. 4 - Prob. 4PSACh. 4 - Prob. 1PSBCh. 4 - Prepare journal entries to record the following...Ch. 4 - Prob. 3PSBCh. 4 - Prob. 4PSBCh. 4 - Prob. 5PSBCh. 4 - Prob. 1GLPCh. 4 - The General Ledger tool in Connect automates...Ch. 4 - Prob. 3GLPCh. 4 - comparative figures for Apple and Google follow....Ch. 4 - Prob. 3FSACh. 4 - Amy Martin is a student who plans to attend...Ch. 4 - You are the financial officer for Music Plus, a...Ch. 4 - OfficialBrands’s general ledger and supplementary...Ch. 4 - Prob. 5BTN
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- Which of the following is a disadvantage of the perpetual inventory system? A. Inventory information is in real-time. B. Inventory is automatically updated. C. It allows managers to make current decisions about purchases, stock, and sales. D. It is cost-prohibitive.arrow_forwardFor each statement below, identify whether the statement applies to the periodic inventory system, the perpetual inventory system, or both. Periodic inventory system, Perpetual inventory system, or Both? a. Normally used for relatively inexpensive goods. b. Keeps a running computerized record of merchandise inventory. c. Achieves better control over merchandise inventory. d. Requires a physical count of inventory to determine the quantities on hand. e. Uses bar codes to keep up-to-the-minute records of inventory.arrow_forward2. What piece of information gained during the understanding of the inventory process would be LEAST relevant to the scoping of inventory locations? A. The company hired a new count supervisor for one of their largest locations B. Book to physical adjustments were material in the prior year for 2 locations C. Cycle count accuracy rates have been greater than management's targets in the prior year and current year to date D. WIP inventory takes longer to countarrow_forward
- Assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. Comparing periodic and perpetual inventory systems For each statement below, identify whether the statement applies to the periodic inventory system, the perpetual inventory system, or both. Normally used for relatively inexpensive goods. Keeps a running computerized record of merchandise inventory. Achieves better control over merchandise inventory. Requires a physical count of inventory to determine the quantities on hand. Uses bar codes to keep up-to-the-minute records of inventory.arrow_forwardWhich of the following are characteristics of a perpetual inventory system? (a). Management knows how much inventory is on hand at all times. (b). Purchases of inventory are recorded to the inventory account. (c). The computer tracks inventory upon a sale and the cost of goods and inventory are immediately updated. (d). All of these.arrow_forwardAssume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. Comparing periodic and perpetual inventory systems For each statement below, identify whether the statement applies to the periodic inventory system, the perpetual inventory system, or both. a. Normally used for relatively inexpensive goods. b. Keeps a running computerized record of merchandise inventory. c. Achieves better control over merchandise inventory. d. Requires a physical count of inventory to determine the quantities on hand. e. Uses bar codes to keep up-to-the-minute records of inventory.arrow_forward
- Concept Integration. Your appliance manufacturingcompany recently implemented a just-in-time inventory system (see Chapter 9) for all parts used in themanufacturing process. How might you expect thismove to affect the company’s inventory turnover rate,current ratio, and quick ratio?arrow_forwardState which of the following inventory methods would best attain the goals of management. Indicate your answer by writing the proper letter in the blank beside each specific goal. FIFO LIFO Weighted-average Specific identification Management wants to report approximate current inventory replacement costs on its year-end balance sheet during a period of rising prices. Management wants to maximize net income during a period of rising prices. The company sells yachts, deep-sea fishing boats, and off-shore speed boats. Management wants to maximize net income during a period of falling prices. Management wants to minimize net income during a period of falling prices. Management wants to match current cost of goods sold witharrow_forwardYou have been hired by Johnson and Johnson Corp. this year. Your supervisor approaches you and need you recommendation on the inventory valuation assumption you will recommend for the company to use instead to using Specific Identification method. Instruction: Identify each of the cost flow assumptions that company can use. Explain the advantages and disadvantages of using each of them. Each one will you recommend and Why? What are the characteristics of a Just-in-time inventory system? Explain some advantages and risks of Just-in-time inventory system.arrow_forward
- Which of the following is an advantage of the periodic inventory system? frequent physical inventory counts O cost prohibitive time consuming O real-time information for managersarrow_forwardRequired: An auditor is trying to figure out if the inventory at an electronics store is obsolete. From the list below, identify whether each attribute would be useful for predicting inventory obsolescence or not. Predictive Attributes Inventory location Purchase date Manufacturer Identified as obsolete Sales revenue Inventory color Inventory cost Inventory description Inventory size Inventory type Days since last purchase Predictive?arrow_forwardUnder a perpetual inventory system a. accounting records continuously disclose the amount of inventory b. increases in inventory resulting from purchases are debited to Purchases c. there is no need for a year-end physical count d. the purchase returns and allowances account is credited when goods are returned to vendorsarrow_forward
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