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ACC 100 Chapter 6: ACC 100 Chapter 6 Notes.docx

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goldswan943
13 Mar 2012
School
Ryerson University
Department
Accounting
Course
ACC 100
Professor
Walter Krystia

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Document Summary

Periodic system: system in which the inventory account is updated only at the end of the period. Perpetual system: system in which the inventory account is increased at the time of each purchase and decreased at the time of each sale. Specific identification method: an inventory costing method that relies on matching unit costs with the actual units sold. Weighted average cost method: an inventory costing method that assigns the same unit cost to all units available for sale during the period: cost of goods available for sale / units available for sale. Fifo method: an inventory costing method that assigns the most recent costs to ending inventory.

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Related Questions

Under a perpetual inventory system, the acquisition of merchandise for resale is debited to

a. Cost of merchandise sold account

b. Purchases account

c. Inventory account

d. Supplies account

The following data were extracted from the accounting records ofHarkins company for the year ended April 30,2014:

merchandise inventory, may 1,2013 380,000

merchandise incentory, april 30,2014 415,000

purchases 3,800,000

purchases returns and allowances 150,000

purchases discounts 80,000

sales 5,850,000

freight in 16,600

a) prepare the cost of merchandise sold section of the yearended April 30,2014, using the periodic inventory system.

b) determine the gross profit to be reported on the incomestatement for the year ended April 30,2014.

c) would gross profit be different if the perpetual inventorysystem was used instead of the periodic inventory system?

If a purchaser using a perpetual inventory system pays the transportation costs, then the

a. Merchandise Inventory account is increased

b. Merchandise Inventory account is not affected

c. Freight-out account is increased

d. Delivery expense account is increased