Exam 15: Accounting for Merchandise Inventory

Given the following accounts: [1] Cash [2] Accounts receivable [3] Merchandise inventory [4] Supplies [5] Accounts payable [6] Sales [7] Sales returns and allowances [8] Sales discounts [9] Cost of goods sold [10] Purchases [11] Purchase returns and allowances [12] Purchase discounts [13] Freight-in Indicate the account(s) to be debited and credited to record the following transactions. -Sold merchandise for cash.- Periodic Debit ________ & ________ Credit ________ & ________

Which of the following should not be included in inventory costs?

The journal entry to record the return of a purchase of inventory under the periodic system includes a:

Given the following accounts: [1] Cash [2] Accounts receivable [3] Merchandise inventory [4] Supplies [5] Accounts payable [6] Sales [7] Sales returns and allowances [8] Sales discounts [9] Cost of goods sold [10] Purchases [11] Purchase returns and allowances [12] Purchase discounts [13] Freight-in Indicate the account(s) to be debited and credited to record the following transactions. -Purchased merchandise with credit terms of 2/10,n/30.- Perpetual Debit ________ & ________ Credit ________ & ________

The specific identification method is a compromise between LIFO and FIFO.

The beginning inventory of this year is overstated.This error would cause:

Title passes immediately to the buyer under FOB ________.

Under the ________ inventory system,cost of goods sold and the amount of merchandise inventory on hand are updated when merchandise is bought and sold.

Determine the estimated cost of the ending inventory for Hawkeye Tack as of September 30 by the retail method from the following data: Cost Retail Sep. 1 Beginning inventory \5 00 \8 00 September purchases 3,750 6,000 September sales 5,500

Given the following accounts: [1] Cash [2] Accounts receivable [3] Merchandise inventory [4] Supplies [5] Accounts payable [6] Sales [7] Sales returns and allowances [8] Sales discounts [9] Cost of goods sold [10] Purchases [11] Purchase returns and allowances [12] Purchase discounts [13] Freight-in Indicate the account(s) to be debited and credited to record the following transactions. -Sold merchandise on account - Periodic $\text {Debit}$$\underline{\quad\quad}$ & $\underline{\quad\quad}$ $\text {Credit}$$\underline{\quad\quad}$ & $\underline{\quad\quad}$

Chewy Candy has a beginning inventory of $1,000 with a retail value of $1,800.June purchases were $3,000,with a retail value of $4,700 and retail sales were $4,200.What is the June 30 estimated ending inventory at cost under the retail method?

Given the following accounts: [1] Cash [2] Accounts receivable [3] Merchandise inventory [4] Supplies [5] Accounts payable [6] Sales [7] Sales returns and allowances [8] Sales discounts [9] Cost of goods sold [10] Purchases [11] Purchase returns and allowances [12] Purchase discounts [13] Freight-in Indicate the account(s) to be debited and credited to record the following transactions. -Paid for merchandise after the discount period expired.- Periodic Debit ________ & ________ Credit ________ & ________

Inventory becomes part of Cost of Goods Sold when a company:

Compute the cost of ending inventory using the retail method when goods available for sale at cost are $15,000,retail is $25,000,and sales at retail equal $20,000.What will the cost ratio be? What will the ending inventory be?

Chocolate Heaven had the following data for November: Cost Price Retail Price Beginning inventory \ 8,000 \ 13,000 Purchases 18,000 25,000 Sales 30,000 The cost of the estimated inventory on November 30 under the retail method is:

This method assumes that the most recently acquired goods are sold first.

The freight paid on goods purchased F.O.B.shipping point was debited to the Freight Expense account.This error would cause:

As a result of understating ending inventory by $10,000 at the end of Year 1:

Assume that in Year 1,the ending merchandise inventory is overstated by $30,000.If this is the only error in Year 1,fill in the items below,indicating which items will be understated,overstated,or correctly stated for Year 1. Ending merchandise inventory Year 1 Beginning merchandise inventory Year 1 Cost of goods sold Year 1 Gross profit Year 1 Net income Year 1 Ending owner's capital Year 1

Under the perpetual system,the purchase of merchandise is recorded by a: