6. 5. 4. 3. 2. 1. Which of the following is a characteristic of a perpetual inventory system? a. Inventory purchases are debited to a Purchases account. b. Inventory records are not kept for every item. c. Cost of goods sold is recorded with each sale. d. Cost of goods sold is determined as the amount of purchases less the change in inventory. If a company uses the periodic inventory system, what is the impact on the current ratio of including goods in transit f.o.b. shipping point in purchases, but not ending inventory? a. Overstate the current ratio. b. Understate the current ratio. c. No effect on the current ratio. d. Not sufficient information to determine effect on the current ratio. Goods in transit which are shipped f.o.b. shipping point should be a. included in the inventory of the seller. b. included in the inventory of the buyer. c. included in the inventory of the shipping company. d. None of these answer choices are correct. Goods in transit which are shipped f.o.b. destination should be a. included in the inventory of the seller. b. included in the inventory of the buyer. c. included in the inventory of the shipping company. d. none of these answers are correct. Kaniper Company has the following items at year-end: Cash in bank Petty cash Short-term paper with maturity of 2 months Postdated checks Kaniper should report cash and cash equivalents of a. $35,000. b. $35,300. c. $40,800. d. $50,800. a. $920,000. b. $840,000. c. $860,000. d. $930,000. $35,000 300 15,500 1,400 Bell Inc. took a physical inventory at the end of the year and determined that $780,000 of goods were on hand. In addition, Bell, Inc. determined that $60,000 of goods that were in transit that were shipped f.o.b. shipping point were actually received two days after the inventory count and that the company had $80,000 of goods out on consignment. What amount should Bell report as inventory at the end of the year?