Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 6, Problem 5DQ
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Explain the reasons for wrong balance of merchandise inventory account.
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Which of the following is false regarding a perpetualinventory system?a. Physical counts are never needed because records aremaintained on a transaction-by-transaction basis.b. The Inventory records are updated with each inventorypurchase, sale, or return transaction.c. Cost of Goods Sold is increased as sales are recorded.d. A perpetual inventory system can be used to detectshrinkage
Under the periodic inventory system, the merchandise inventory account is not kept up to date for purchases and sales. As a result, the inventory shrinkage cannot be directly determined. True or False
Under a perpetual inventory system, acquisition of inventory is dented to the purchases account. True or false?
Chapter 6 Solutions
Principles of Accounting
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Assume a large shipment of uninsured merchandise...Ch. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Indicate whether each of the statements that...Ch. 6 - Prob. 2SECh. 6 - Prob. 3SE
Ch. 6 - Prob. 4SECh. 6 - Prob. 5SECh. 6 - Prob. 6SECh. 6 - Prob. 7SECh. 6 - Prob. 8SECh. 6 - Record the following transactions using T...Ch. 6 - Prob. 10SECh. 6 - Prob. 11SECh. 6 - Sutton Hills Companys management made the...Ch. 6 - Prob. 2EACh. 6 - A company has the following data: net sales,...Ch. 6 - Prob. 4EACh. 6 - Prob. 5EACh. 6 - Linear Company engaged in the following...Ch. 6 - Prob. 7EACh. 6 - Prob. 8EACh. 6 - Prob. 9EACh. 6 - Prob. 10EACh. 6 - Prob. 11EACh. 6 - Prob. 12EACh. 6 - Prob. 13EACh. 6 - Prob. 14EACh. 6 - Prob. 15EACh. 6 - Matuska Tools Corporations income statements...Ch. 6 - Selected accounts from Murrays Furniture Stores...Ch. 6 - Prob. 3PCh. 6 - Selected accounts from Dences Gourmet Shops...Ch. 6 - Prob. 5PCh. 6 - Teague Company engaged in the following...Ch. 6 - Prob. 7APCh. 6 - Prob. 8APCh. 6 - Prob. 9APCh. 6 - Prob. 10APCh. 6 - Prob. 11APCh. 6 - Prob. 12APCh. 6 - Prob. 1CCh. 6 - Prob. 2CCh. 6 - Prob. 3CCh. 6 - Prob. 4CCh. 6 - Prob. 5CCh. 6 - Prob. 6C
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Why is it necessary to adjust the Merchandise Inventory account under a periodic inventory system?arrow_forwardWhere there is a reversal of a previous inventory write-down, the entry would involve a _______to the inventory account and a ___________to an income account labelled ‘Reversal of previous inventory write-down’ or its equivalent. deletion; creation credit; debit None of the given options are correct debit; creditarrow_forwardHELP MEarrow_forward
- Why is it important to periodically take a physical inventory when using a perpetual inventory system?arrow_forwardWhich of the following transactions would not result in an adjustment to the inventory account under a perpetual inventory system? a.The sale of merchandise for cash b.The sale of merchandise on credit c.The receipt of payment from a customer within the discount period d.The return of merchandise by a customerarrow_forwardWhen the merchandise inventory account provides a running balance of the goods on hand, which inventory system is being used? a.Perpetual inventory system b.Periodic inventory system c.Either the periodic or the perpetual inventory system, since both keep a running balance in the merchandise inventory account d.Neither the periodic nor the perpetual inventory system, since both systems do not keep a running balance in the merchandise inventory accountarrow_forward
- You have Noticed that the A/R clerk has created abnormally high number of credit memos . You also notice the inventory does not reflect the additional inventory resulting from the sales returns. What would you do, and how would you document your decision?arrow_forwardHello, Besides the first entry, I'm not sure how to record these transactions for a perpetual inventory system thanksarrow_forwardTo correct a sales invoice that was accidentally posted containing the wrong inventory - Select one: O a. reverse all original data in the sales journal with a minus sign and post; enter new sales data and post b. open adjust an invoice; locate the invoice; edit the inventory item, add the quantity and post O c. pay the original invoice; prepare an invoice for the correct inventory, add the quantity and post O d. prepare a new invoice for the correct inventory item, add the quantity and post Show Transcribed Text Regular inventory purchases and sales journal entries have what in common - Select one: O a. both consist entirely of linked accounts O b. the price field in both entries is the same O c. you can edit the account field in both entries O d. the entries have nothing in common Show Transcribed Text Ć If the wrong inventory is selected in a purchase, you can make the correction before posting by - Select one: O a. opening a new purchase invoice and entering the correct work b.…arrow_forward
- Under the perpetual inventory system, the business does not maintain records that show the running balances of inventory on hand and cost of goods sold as at any given point of time. True Falsearrow_forwardA two bin system for inventory control eliminates the need for the perpetual inventory tracking. Is it true or falsearrow_forwardA company forgets to record a purchase on credit in the purchases account, but ending inventory is correct. The effect of this mistake in the current year is:arrow_forward
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Chapter 6 Merchandise Inventory; Author: Vicki Stewart;https://www.youtube.com/watch?v=DnrcQLD2yKU;License: Standard YouTube License, CC-BY
Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License