1.
a.
Determine the reason why does an inventory need to be counted.
1.
a.
Answer to Problem 1DQ
The inventory is counted in order to ensure that the inventory recorded According to the perpetual inventory, truly represents the inventory on hand.
Explanation of Solution
Perpetual Inventory System:
Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.
1.
b.
Describe the situation that would happen if the count was done incorrectly.
1.
b.
Answer to Problem 1DQ
If the count was done incorrectly, it would either understate the ending inventory or overstate the ending inventory. This is because to match the physical count the inventory account is adjusted.
Explanation of Solution
Ending Inventory:
It represents the quantity and price of the goods unsold and laying at the store at the end of a particular period.
c.
Describe the terms FIFO and LIFO that has to do with inventory.
c.
Answer to Problem 1DQ
The terms FIFO and LIFO has the flow of inventory costs to do with inventory through the records of accounting.
Explanation of Solution
First-in-First-Out method:
In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The cost of merchandise sold is calculated by adding all the total cost of merchandise sold during the month. The value of the ending inventory consists of the recent purchased items.
Last-in-Last-Out:
In Last-in-First-Out method, the costs of last purchased items are considered as the cost of goods sold, for the items which are sold first. The value of the closing stock consists of the initial purchased items.
Want to see more full solutions like this?
Chapter 5 Solutions
Financial Accounting, Student Value Edition (4th Edition)
- Subject: Cost Account Deboer Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price Units in beginning inventory Units produced $ 182 50 2,140 Units sold 880 Units in ending inventory 1,310 Variable costs per unit: Direct materials $ 80 Direct labor Variable manufacturing overhead Variable selling and administrative $ 32 $9 $ 15 Fixed costs: Fixed manufacturing overhead $ 25,680 Fixed selling and administrative $ 21,120 What is the total period cost for the month under the variable costing approach?arrow_forwardProvide correct answer general accountingarrow_forwardPlease HELPPParrow_forward
- Blazer corporation had provided correct answer general accountingarrow_forwardWatch this video "data Visualization for Data Analysis and Analytics" and then share in a one page paper what you learned and how you plan to use it in your career?arrow_forwardCan you please answer the accounting question?arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub