the main difference between periodic and perpetual invenotory system is

a

The length of time it it takes to sell an item in inventory

b

the length of time it takes to receive goods into inventory

c

the frequency with which the accounting records are updated to reflect the receipt of goods into inventory

d

the frequency of receipt of goods by the receiving department

Question 2 (1 point)

Under a periodic invnetory system, which of the following journal entries are booked at the time goods with a purchase price of $ 200 are sold to the customer for $ 500:

a

Debit Accounts Receivable for $ 500 and Credit Sales for $ 500

b

Debit Accounts Receivable for $ 500, credit inventory for $ 200 and credit sales for $ 300

c

Debit Purchases for $ 500 and Credit Sales for $ 500

d

Debit Accounts Receivable for $ 200 and Credit Inventory for $ 200

Question 3 (1 point)

Which of the follwoing assumptions regarding the first-in first-out method is/ are correct

a

inventory items are assumed to be purchased in the order they are acquired

b

inventory items are assumed to be sold in the order they are acquired

c

average cost per unit is calculated after each sale of goods

d

items in ending inventory do not reflect the most recent purchases

Question 4 (1 point)

Periodic inventory system provides more timely infirmation to managers .

True

False

Question 5 (1 point)

Lower of cost and net realizable value principle involves:

a

recording the revenue on sale of merchandise inventory at the market price of an inventory item

b

writing inventory down to the lower amount of the inventory cost and the amount expected to be received upon sale of the goods

c

writing inventory up to the higher of inventory cost and the current market price.

d

all of the above

Question 6 (1 point)

Gross Profit Margin is calculated as follows

a

Profit - Revenue

b

Net selling Price - Cost

c

Net Sales - Cost of Goods Sold

d

Cost of Goods Sold - Net Sales

Question 7 (1 point)

Caps Co., a stre that sell baseball hats, received a shipment of inventory. The purchase price of inventory is $ 2,000, a bulk discount of% off isreceived, the shipping charges are $ 200 and refundable taxes are $ 140. Total cost of inventory is

a

1200

b

1540

c

2000

d

1400

Question 8 (1 point)

Trade discounts are provided by a manufacturer or wholesaler for the following reason:

a

a specific percentage discount provided to customers based on specific industry benchmark

b

a credit discount offered based on returned merchandise

c

a specific percentage discount provided to customers based on the quantities/ volume of goods purchased

d

a specific percentage discount provided to encourage the customer to engage in early payment of invoices

Question 9 (5 points)

From the following info. calculate the value of Ending Inventory in FIFO and Wighted Average Cost method 9rounded to closest whole number)

DetailsNo. of UnitsPrice per unitBeginning Inventory180$ 30Feb 20 - Purchases315$ 29Apr 30 - Sold145$ 40May 15 - Sold225 $ 35

a

$ 3625 and $ 3670 resp.

b

$ 3725 and $ 3725 resp

c

$ 3670 and $ 3625resp.

d

none of the above

Question 10 (1 point)

Which of the following ysstem requires a physical count of inventory to determine the amount of inventory to report on the balance sheet.

a

Perpetual Inventory System

b

Periodic Inventory System

c

both the systems

d

none of the above

Question 11 (2 points)

The owner of 555 Antiques, an aniques dealer, purchased an estate including a rare collection of superhero comic books for a bid price of $ 37,500. The terms of the purchase price were FOB Shipping Posint, and the cost of transporting the goods to the 555 Antiques warehouse was $ 1,200. 555 Antiques insured the shipment at a cost of $ 150. Prior to placing the goods in the store , they cleaned and refurbished some merchandise at a cost of $ 490 for labour and parts. Determine the cost of the inventory.

a

38700

b

37500

c

39340

d

38850

Question 12 (1 point)

Clsoing inventory is shown on Income Statment as cost for the period.

True

False

Question 13 (1 point)

At the year-end Carpet & Company has shipped $5000 worth of merchandise goods on FOB Destination basis to Stark Company. These goods are still in transit at the end of the year. Since the goods are on th way to stark company, at the year end Stark company should include this $ 5000 in their closing stock.

True

False

Question 14 (1 point)

If prices are following, the FIFO method of inventory valuation result in the lower value of closing stock.

True

False

Question 15 (1 point)

Which accounting principle requires that a company use the same accounting methods period after period

a

Business entity principle

b

Revenue Recognition Principle

c

consistency principle

d

Lower of cost and net realizable value principle