Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Question
Chapter 5, Problem 3Q
To determine
Perpetual and periodic inventory system: In merchandise business, there are two types of inventory system followed for maintaining inventory records—perpetual and periodic inventory system. It helps to evaluate the amount of inventory purchased, sold and held at the end of an accounting period.
To Differentiate: the perpetual inventory system and periodic inventory system
To discuss: the potential benefits of a perpetual inventory system
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Chapter 5 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Waymon Co. has net sales of 100,000, cost of goods...Ch. 5 - Masie Ascot believes revenues from credit sales...Ch. 5 - (a) What is the primary source document for...Ch. 5 - Prob. 8QCh. 5 - As the end of Smyle Companys fiscal year...Ch. 5 - To encourage bookstores to buy a broader range of...
Ch. 5 - Goods costing 1,900 are purchased on account on...Ch. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Prob. 15QCh. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - What merchandising account(s) will appear in the...Ch. 5 - What types of businesses are most likely to use a...Ch. 5 - Prob. 20QCh. 5 - In the following cases, use a periodic inventory...Ch. 5 - Prob. 22QCh. 5 - What factors affect a companys gross profit...Ch. 5 - Prob. 24QCh. 5 - Prob. 25QCh. 5 - On July 15, a company purchases on account goods...Ch. 5 - Presented here are the components in Salas...Ch. 5 - Prob. 5.2BECh. 5 - Prob. 5.3BECh. 5 - Prob. 5.4BECh. 5 - Prob. 5.5BECh. 5 - Explain where each of these items would appear on...Ch. 5 - Prob. 5.7BECh. 5 - Prob. 5.8BECh. 5 - Prob. 5.9BECh. 5 - Prob. 5.10BECh. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Prob. 5.13BECh. 5 - Prob. 5.14BECh. 5 - Prob. 5.1DIECh. 5 - Prob. 5.2DIECh. 5 - Prob. 5.3DIECh. 5 - Prob. 5.4DIECh. 5 - Prob. 5.5DIECh. 5 - Prob. 5.6DIECh. 5 - Prob. 5.1ECh. 5 - Assume that on September 1, Office Depot had an...Ch. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Prob. 5.5ECh. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.1APCh. 5 - Prob. 5.2APCh. 5 - Prob. 5.3APCh. 5 - Prob. 5.4APCh. 5 - Prob. 5.5APCh. 5 - Prob. 5.6APCh. 5 - Prob. 5.7APCh. 5 - Prob. 5.8APCh. 5 - Prob. 5.9APCh. 5 - Prob. 5.1CACRCh. 5 - Prob. 5.2CACRCh. 5 - Prob. 5.1EYCTCh. 5 - Prob. 5.2EYCTCh. 5 - Prob. 5.3EYCTCh. 5 - Prob. 5.4EYCTCh. 5 - Prob. 5.6EYCTCh. 5 - Prob. 5.7EYCTCh. 5 - Prob. 5.8EYCTCh. 5 - Prob. 5.9EYCTCh. 5 - Explain the difference between the...Ch. 5 - For each of the following income statement line...Ch. 5 - Prob. 5.3IFRSCh. 5 - Prob. 5.4IFRS
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Similar questions
- You have decided to open up a small convenience store in your hometown. As part of the initial set-up process, you need to determine whether to use a perpetual inventory system or a periodic inventory system. Write an evaluation paper comparing the perpetual and periodic inventory systems. Describe the benefits and challenges of each system as it relates to your industry and to your business size. Compare at least one example transaction using the perpetual and periodic inventory systems (a purchase transaction, for example). Research and describe the impact each system has on your financial statements. Decide which system would be the best fit for your business, and support your decision with research.arrow_forwardYou own a clothing store and use a periodic inventory system. Research like companies in the clothing industry and answer the following questions. Which inventory system is most used in clothing stores, periodic or perpetual? Why can periodic inventory reporting be a better approach to use than perpetual inventory reporting for this type of industry? What are some of the advantages and disadvantages to the periodic inventory method? What other types of businesses may use the periodic inventory method rather than the perpetual method?arrow_forwardIn forecasting the sales for the year, which is not included in making assumptions? Select the correct response: market share advertising and product promotion general economic condition availability of elerical staff for credit and collectionsarrow_forward
- A company is trying to set up proper internal controls for their accounts payable/inventory purchasing system. Currently the purchase order is generated by the same person who receives the inventory. Together the purchase order and the receiving ticket are sent to accounts payable for payment. What changes would you make to improve the internal control structure? A. No changes would be made since the person paying the bills is different from the person ordering the inventory. B. The person in accounts payable should generate the purchase order. C. The person in accounts payable should generate the receiving ticket once the invoice from the supplier is received. D. The responsibilities of generating the purchase order and receiving the inventory should be separated among two different people.arrow_forwardWhich of the following is an advantage of using a perpetual inventory system A. It is effective with hand written inventory cards B. It is able to detect when errors are made C. It is relatively easy and inexpensive to set up D. It is less time consuming than other methodsarrow_forward1. Recommend how projected financial statements and other measures of business performance could be used in a furniture and appliance store to evaluate its activities and processes. 2. Assess the objectives of financial management and the role of different stakeholders in the financial strategy in a furniture and appliance store. 3. In a furniture store evaluate its main sources of potential financial risk using suitable techniques. For each risk area you are required to recommend and justify appropriate action to reduce the exposure. 4. In a furniture store evaluate options for the financing of business activities. You are required to include in your evaluation the characteristics of the different sources of finance. 5. how a furniture store might evaluate potential investment opportunities to ensure that decisions reflect the needs of the business and its financial management strategy.arrow_forward
- How does the strategic profit model assist retailers in planning and evaluating the performance of their marketing and financial strategies? What differences would you expect to see when comparing Gifts To Go’s specialty store strategic profit model with that of two dry-cleaning service businesses?arrow_forward1.Forecasts using Point-of-Sales (POS) systems are based on A.different deterministic factors that affect market demandB. developments and findings in markets that are relatively similar C.the use of store scanners in weekly and biweekly store audits D.computer analysis of past performance data to predict future market demand 2.For retailers and channel members, an important method of forecasting sales is A.time series models B.econometric models C.sales force composite estimates D.point-of-sales (POS) based projections 3. In primary research, once data has been collected and the questionnaire has been coded, the next step for the researcher is to A.analyze the data B.interpret the data results C.make recommendations from the findings D.input the data into a computer program 4.Among the sampling decisions that must be made, researchers must select the _____, which is the group of individuals who will be included in the survey. A.sample size…arrow_forwardStrategic decisions and management accounting. Consider the following series of independent situations in which a firm is about to make a strategic decision. Decisions A running shoe manufacturer is weighing whether to purchase leather from a cheaper supplier in order to compete with lower priced competitors. An office supply store is considering adding a delivery service that its competitors do not have. A regional retailer is deciding whether to install self-check-out counters. This technology will reduce the number of check-out clerks required in the store. A local florist is considering hiring a horticulture specialist to help customers with gardening questions. For each decision, state whether the company is following a cost leadership or a product differentiation strategy. 2. For each decision, discuss what information the managerial accountant can provide about the source of competitive advantage for these firms.arrow_forward
- Describe the purpose of a purchase order by selecting the correct statement(s) below. (Check all that apply.) A purchase order is a document the purchasing department uses to place an order with a vendor. Multiple copies of the purchase order are distributed to other departments to increase internal control of company pu A purchase order authorizes a vendor to ship ordered merchandise at a stated price and terms. A purchase order is a bill received from the vendor that reflects the amount owed by the buyer.arrow_forwardIn a merchandising (retail) type businesses, how can you use the periodic inventory method and still use a computer to monitor with inventory?arrow_forwardIn comparing the accounts of a merchandising company with those of a service company, what additional accounts would the merchandising company likely use, assuming it employs a perpetual inventory system?arrow_forward
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