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20. The primary difference between the periodic and perpetual inventory systems is that a

periodic system determines the inventory on hand only at the end of the accounting period

periodic system provides an easy means to determine inventory shrinkage

periodic system records the cost of the sale on the date the sale is made

periodic system keeps a record showing the inventory on hand at all times

21.Merchandise is ordered on November 10; the merchandise is shipped by the seller and the invoice is prepared, dated, and mailed by the seller on November 13; the merchandise is received by the buyer on November 18; the entry is made in the buyer's accounts on November 20. The credit period begins with what date?

November 18

November 10

November 20

November 13

22. Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

debit to Inventory

credit to Customer Refunds Payable

debit to Cash

credit to Inventory

23.The arrangements between buyer and seller as to when payments for merchandise are to be made are called

net cash

gross cash

credit terms

cash on demand

24.If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as

FOB destination

FOB n/30

FOB buyer

FOB shipping point

25.Which document authorizes the purchase of the inventory from an approved vendor?

the petty cash voucher

the vendor's invoice

the purchase order

the receiving report

26. The primary objectives of control over inventory are

a.safeguarding the inventory from damage and maintaining constant observation of the inventory.

b.maintaining constant observation of the inventory and reporting inventory in the financial statements.

c.reporting inventory in the financial statements.

d.safeguarding inventory from damage and reporting inventory in the financial statements.

27. When merchandise sold is assumed to be in the order in which the purchases were made, the company is using

a.first-in, last-out.

b.first-in, first-out.

c.average cost.

d.last-in, first-out.

28. The inventory costing method that reports the most current prices in ending inventory is

a.LIFO.

b.FIFO.

c.average cost.

d.specific identification.

29. When using a perpetual inventory system, the journal entry to record the cost of goods sold is:

debit Cost of Goods Sold; credit Inventory

debit Cost of Goods Sold; credit Sales

No journal entry is made to record the cost of goods sold.

debit Inventory; credit Cost of Goods Sold

30. During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of goods sold is

a.average cost.

b.weighted average.

c.FIFO.

d.LIFO.