Exam 6: Cost Of Goods Sold and Inventory

Dietz, Inc. sells merchandise on credit. If a customer pays its balance due within the discount period, what is the effect of the payment on Dietz's accounting equation?

Match the terms with the descriptions provided. -Term referring to transportation costs paid by the seller.

The following inventory transactions occurred at Zapata, Inc. which uses a perpetual inventory system: October 2 Purchased 50 units of inventory from a supplier on credit. The goods cost $30 each and the credit terms were 2/10, n/15. The shipping costs were $100 under the terms FOB destination. October 4 Returned 5 units of inventory to the supplier for credit on account. October 6 Sold 15 units for $50 each to customers for cash. October 7 Accepted a return of one unit of inventory from the customer for a cash refund. October 11 Paid the supplier for one-half of the inventory purchased on October 2nd. October 17 Paid the remaining balance owed to the supplier. Record the appropriate journal entry for each of these transactions.

At the year-end inventory count, if goods in transit are shipped FOB destination, they should be included in the inventory count of

Dollar Town is a merchandising company that uses the periodic inventory system. Selected account balances are listed below: -Refer to the information provided for Dollar Town. Calculate the net cost of goods purchased.

A company using a periodic inventory system must total the selling prices of the units on hand at the end of the period in order to value the ending inventory.

Bihary Company has a beginning balance in its inventory account of $2,250 and the ending balance is $1,500. Cost of goods sold is $9,750. According to the cost of goods sold model, what was the amount of inventory purchased during the year?

Match the terms with the descriptions provided. -Transportation costs paid by the buyer.

Madlock Company, which started business at the beginning of 2019, selected the FIFO method for its inventory costing. In order to maximize profits for 2019 under this method, purchase prices must be

Selected data from the financial statements for Tarpley & Underwood are presented below: -Refer to the information presented for Tarpley & Underwood. First, determine the dollar amount of cost of goods purchased. Then, prepare a cost of goods sold schedule using the cost of goods sold model illustrated in the text.

The weighted average cost per unit must be continually updated under the perpetual inventory system.

The following data are available for one of the products sold by Paschal Exports, which uses a perpetual inventory system. -Refer to the information provided for Paschal Exports. If the FIFO method of inventory costing is used, determine the following amounts: A) Cost of goods sold for the units sold on July 10th B) Ending inventory on July 31st

Gools, Inc. buys designer clothing to sell in its retail stores. Since much of the merchandise comes from Europe, Gools, Inc. must pay freight charges. Which of the following statements must be true?

Match the terms with the descriptions related to merchandise sales and purchases. -Granted a customer a credit on its balance due for goods that were returned.

Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional information is available for the month of January: -Refer to the information provided for Tedder Co. Which of the following entries correctly records the purchase assuming the units were acquired on credit under terms of 2/10, n/30?

Match the terms with the descriptions related to merchandise sales and purchases. -Shipping costs paid to acquire merchandise.

Cost of goods sold represents an outflow of a resource, inventory, which is caused by the sale of products.

Qualls Department Store counted some of its inventory items twice. As a result, its operating expenses will be

All of the following are acceptable for financial accounting purposes except

Which of the following best describes "cost of goods available for sale"?