Term
the largest expense on the income statement of most merchandising compaanies is |
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Definition
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Term
a perpetual inventory system offers all the following advantages except |
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Definition
it is less expensive than a periodic system |
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Term
if a company uses perpetual inventory system, which of the following entries are required to record the purchase of merchandise on credit? |
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Definition
Dr Inventory
Cr Accounts Payable |
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Term
if a company uses a perpetual inventory system, which of the following entries are required to record the cost of merchandise sold on credit? |
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Definition
1. Accounts Receivable (Dr)
Sales (Cr)
2. Cost Of Goods Sold (Dr)
Inventory (Cr) |
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Term
In a periodic inventory system the quantity of ending inventory is determined by: |
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Definition
a physical inventory count |
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Term
Given the following data, what is the COGS
Sales Revenue
950,000
Beg. Invt.
120,000
End. Invt.
250, 000
Purchases
800,000 |
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Definition
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Term
What is the cost of Beg. Invt.
Sales revenue
650,000
cost of goods sold
475,000
end. invt.
150,000
purchases
620,000 |
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Definition
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Term
Given the following data, what is the weighted-average cost of end. invt. rounded to the nearest dollar.
sales revenue
100 units at $15 per unit
beg invt
40 units at $9 per unit
purchases
80 units at $10 per unit |
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Definition
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Term
Given the following data, what is the COGS at the determinded under the FIFO method?
sales revenue
100 units at $15 per unit
beg invt.
40 units at $9 per unit
purchases
80 units at $10 per unit |
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Definition
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Term
What is the end. invt. as determined under the LIFO costing method?
sales revenue
100 units at $15 per unit
beg. invt.
40 units at $9 per unit
purchases
80 units at $10 per unit |
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Definition
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Term
Calculate the cost of end. invt. using the periodic LIFO method
1/1 Beg Invt.---20 units at $10 per unit
3/5 Purchases---50 units at $12 per unit
5/30 Purchases---40 units at $13 per unit
10/25 Purchases---60 units at $14 per unit
12/31 End. Invt.---35 units |
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Definition
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Term
Calculate the cost of End Invt. using the weighted-average method:
1/1 Beg Invt---70 units at $10 per unit
3/5 Purchases---50 units at $12 per unit
5/30 Purchases--- 40 units at $13 per unit
10/25 Purchases---60 units at $14 per unit
12/31 End Invt---35 units |
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Definition
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Term
when the FIFO method is used, End Invt. is assumed to consist of: |
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Definition
the most recently purchased units |
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Term
When the LIFO method is used, COGS is assumed to consist of: |
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Definition
the most recently purchased units |
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Term
When inventory prices are falling, the FIFO method will generally yield a gross margin that is: |
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Definition
less than under the LIFO method |
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Term
When prices are rising, the End. Invt. balance reported on a LIFO basis is generally |
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Definition
lower than on a FIFO basis |
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Term
when prices are decreasing, the End. Invt. balance reported on a FIFO basis is generally: |
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Definition
lower than on a LIFO basis |
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Term
which of the following statements is generally true when prices are rising?
a. LIFO produces taxable income that exceeds taxable income under FIFO
b. FIFO results in paying less taxes than under LIFO
c. managers will use LIFO if they want to maximize income reported to sharholders.
d. the use of LIFO will result in paying less taxes than under FIFO |
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Definition
D. the use of LIFO will result in paying less taxes than under FIFO |
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Term
FIFO tends to decrease taxes when: |
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Definition
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Term
The lower-of-cost-or-market rule is an application of: |
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Definition
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Term
an error in the End. Invt. of a given accounting period: |
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Definition
automatically creates errors in COGS for the current and next period. |
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Term
If ending inventory for the current period is overstated by $3,500: |
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Definition
net income of the next period will be understated by $3,500 |
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Term
Inventory turnover is calculated as: |
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Definition
COGS / avg inventory fr the period |
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Term
which of the following statements about inventory turnover is the most appropriate? |
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Definition
the most profitable turnover ratio may not necessarily be the highest |
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Term
in a period of increasign prices, which inventory flow assumption will result in the lowest amount of income tax expence |
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Definition
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Term
an error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. the effect of the this error in the current period is |
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Definition
COGS--Understated
NI--Overstated |
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Term
Trane Co. purchased merchandise inventory with an invoice price of $4,000 and credit terms of 2/10 n/30. what is the net cost of the goods if trane co. pays within the discount period? |
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Definition
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Term
when a customer returns merchandise purchased on credit, the retailer debits |
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Definition
sales returns and allowances and credits accounts receivable |
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Term
the respective normal account balances of sales, sales returns, and allowances, and sales discounts are |
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Definition
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Term
gross profit for a merchandiser is net sales minus |
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Definition
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Term
beginning inventory plus the COGP equals the |
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Definition
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Term
West Co. has the following acct balances
Purchases---35,000
sales R&A---4,000
purchase discount---2,500
freight-in---1,875
delivery expense---2,500
The COGP is |
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Definition
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Term
using the LIFO inventory method, the value of the ending inventory on June 30 is
June 1---150 Units---$750
June 10---200 Units---$1,200
June 15---200 Units---$1,260
June28---150 Units---$990
$4,200 |
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Definition
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Term
Using FIFO, the amount allocated of COGS for June is
June 1---150 Units---$750
June 10---200 Units---$1,200
June 15---200 Units---$1,260
June28---150 Units---$990
$4,200 |
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Definition
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Term
Using the average cost, the amount allocated to the End Invt on June 30 is
June 1---150 Units---$750
June 10---200 Units---$1,200
June 15---200 Units---$1,260
June28---150 Units---$990
$4,200 |
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Definition
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Term
two categories of expenses in merchandising companies are |
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Definition
cost of goods sold and operating exp |
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Term
sales revenue less cost of goods sold is called |
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Definition
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Term
after gross profit is calculated, operating expenses are deducted to determine |
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Definition
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Term
detailed records of goods held for retail are not maintained under a |
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Definition
periodic inventory system |
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Term
in a perpetual inventory system, cost of goods sold is recorded |
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Definition
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Term
if a company determines COGS each time a sale occurs, it |
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Definition
uses perpetual inventory system |
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Term
the journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit |
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Definition
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Term
if a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the |
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Definition
merchandise inventory acct will be increased |
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Term
stone company purchased merchandise inventory with an invoice prise of $6,000 and credit of 2/10 n/30. what is the net of cost of goods if stone co. pays within the disocunt period? |
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Definition
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Term
the sales returns and allowances acct is classsified as |
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Definition
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Term
when goods are returned that relate to a prior cash sale |
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Definition
the cash acct will be credited |
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Term
the credit terms offered to a customer by a business firm were 2/10 n/30 which means that |
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Definition
the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date |
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Term
on the classified balance sheet, merchandise inventory is classified as |
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Definition
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Term
a recommended internal control procedure for taking physical inventories is that the counting should be done by employees who do not have custodial responsibility for the inventory. this is an example of what type of internal control procedure? |
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Definition
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Term
Beginning Inventory
+ Purchases
- Ending Inventory
= |
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Definition
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Term
Sales
- Sales Returns
- Sales Allowances
- Sales Discounts
= |
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Definition
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Term
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Definition
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Term
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Definition
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Term
On dec. 28, 2008, alpha co. submitted a purchase order to beta co. for goods costing $12,000. the terms of the perchase/sale were "FOB shipping point". on Dec 30the the goods were picked up at the betas warehouse by trucking co. the goods were delivered to alpha co. on Jan 4 2009. as of dec 31 2008 the goods should be included in the inventory of |
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Definition
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