Define merchandise inventory What types of costs are included in the Merchandise Inventory account What is the difference between a product cost and a selling and administrative cost How is the cost of goods available for sale determined What portion of cost of goods available for sale is shown on the balance sheet What portion is shown on the income statement When are period costs expensed When are product costs expensed If PetCo had net sales of $600,000, goods available for sale of $450,000, and cost of goods sold of $375,000, what is its gross margin What amount of inventory will be shown on its balance sheet Describe how the perpetual inventory system works What are some advantages of using the perpetual inventory system Is it necessary to take a physical inventory when using the perpetual inventory system What are the effects of the following types of transactions on the accounting equation Also identify the financial statements that are affected (Assume that the perpetual inventory system is used ) Acquisition of cash from the issue of common stock Contribution of inventory by an owner of a company Purchase of inventory with cash by a company Sale of inventory for cash Northern Merchandising Company sold inventory that cost $12,000 for $20,000 cash How does this event affect the accounting equation What financial statements and accounts are affected (Assume that the perpetual inventory system is used ) If goods are shipped FOB shipping point, which party (buyer or seller) is responsible for the shipping costs Define transportation in Is it a product or a period cost Quality Cellular Co paid $80 for freight on merchandise that it had purchased for resale to customers (transportation in) and paid $135 for freight on merchandise delivered to customers (transportation out) The $80 payment is added to what account The $135 payment is added to what account Why would a seller grant an allowance to a buyer of his merchandise Dyer Department Store purchased goods with the terms 2 10, n 30 What do these terms mean Eastern Discount Stores incurred a $5,000 cash cost How does the accounting for this cost differ if the cash were paid for inventory versus commissions to sales personnel What is the purpose of giving a cash discount to charge customers Define transportation out Is it a product cost or a period cost for the seller Ball Co purchased inventory with a list price of $4,000 with the terms 2 10, n 30 What amount will be added to the Merchandise Inventory account Explain the difference between purchase returns and sales returns How do purchase returns affect the financial statements of both buyer and seller How do sales returns affect the financial statements of both buyer and seller Explain the difference between gross margin and a gain What is the difference between a multistep income statement and a single step income statement What is the advantage of using common size income statements to present financial information for several accounting periods What is the purpose of preparing a schedule of cost of goods sold Explain how the periodic inventory system works What are some advantages of using the periodic inventory system What are some disadvantages of using the periodic inventory system Is it necessary to take a physical inventory when using the periodic inventory system Why does the periodic inventory system impose a major disadvantage for management in accounting for lost, stolen, or damaged goods

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Define merchandise inventory . What types of costs are included in the Merchandise Inventory account? What is the difference between a product cost and a

Define merchandise inventory. What types of costs are included in the Merchandise Inventory account?
What is the difference between a product cost and a selling and administrative cost?
How is the cost of goods available for sale determined?
What portion of cost of goods available for sale is shown on the balance sheet? What portion is shown on the income statement?
When are period costs expensed? When are product costs expensed?
If PetCo had net sales of $600,000, goods available for sale of $450,000, and cost of goods sold of $375,000, what is its gross margin? What amount of inventory will be shown on its balance sheet?
Describe how the perpetual inventory system works. What are some advantages of using the perpetual inventory system? Is it necessary to take a physical inventory when using the perpetual inventory system?
What are the effects of the following types of transactions on the accounting equation? Also identify the financial statements that are affected. (Assume that the perpetual inventory system is used.)
1. Acquisition of cash from the issue of common stock.
2. Contribution of inventory by an owner of a company.
3. Purchase of inventory with cash by a company.
4. Sale of inventory for cash.
Northern Merchandising Company sold inventory that cost $12,000 for $20,000 cash. How does this event affect the accounting equation? What financial statements and accounts are affected? (Assume that the perpetual inventory system is used.)
If goods are shipped FOB shipping point, which party (buyer or seller) is responsible for the shipping costs?
Define transportation-in. Is it a product or a period cost?
Quality Cellular Co. paid $80 for freight on merchandise that it had purchased for resale to customers (transportation-in) and paid $135 for freight on merchandise delivered to customers (transportation-out). The $80 payment is added to what account? The $135 payment is added to what account?
Why would a seller grant an allowance to a buyer of his merchandise?
Dyer Department Store purchased goods with the terms 2/10, n/30. What do these terms mean?
Eastern Discount Stores incurred a $5,000 cash cost. How does the accounting for this cost differ if the cash were paid for inventory versus commissions to sales personnel?
What is the purpose of giving a cash discount to charge customers?
Define transportation-out. Is it a product cost or a period cost for the seller?
Ball Co. purchased inventory with a list price of $4,000 with the terms 2/10, n/30. What amount will be added to the Merchandise Inventory account?
Explain the difference between purchase returns and sales returns. How do purchase returns affect the financial statements of both buyer and seller? How do sales returns affect the financial statements of both buyer and seller?
Explain the difference between gross margin and a gain.
What is the difference between a multistep income statement and a single-step income statement?
What is the advantage of using common size income statements to present financial information for several accounting periods?
What is the purpose of preparing a schedule of cost of goods sold?
Explain how the periodic inventory system works. What are some advantages of using the periodic inventory system? What are some disadvantages of using the periodic inventory system? Is it necessary to take a physical inventory when using the periodic inventory system?
Why does the periodic inventory system impose a major disadvantage for management in accounting for lost, stolen, or damaged goods?