Merchandise that is purchased for the purpose of selling it.
What is Inventory (Merchandise Inventory) anyway?
100
An inventory system that utilizes the Purchases account and utilizes the Cost of Goods Sold calculation.
What is the Periodic Inventory System?
100
An incorrect inventory count has a direct impact on the cost of goods sold calculation. (True / False).
What is........True?
100
Inventory method whereby the newest (most recently bought) inventory items are assumed sold first which leaves the oldest inventory value in the ending inventory.
What is Last In First Out (LIFO)?
100
As applied to inventory, conservatism means that if the value of inventory declines while it is being held, the loss should be recognized in the period of decline.
What is the purpose of the Lower-of-Cost-or-Market method?
200
Ending Inventory becomes this on the next day.
What is Beginning Inventory for the next period?
200
An inventory system that utilizes the Inventory account to record all transactions affecting inventory and maintains an account titled Cost of Goods Sold.
What is the Perpetual Inventory System?
200
The ending inventory count is off by $10,000 (should be higher which means it is understated) which will result in the Net Income being this.
What is understated (too low) by &10,000.
200
Inventory method that identifies each unit sold and/or remaining in inventory to be individually identified and costed.
What is Specific Identification?
200
Replacement cost of inventory (the cost to replace).
What does Market mean in the Lower-of-Cost-or-Market method (LCM).
300
This calculation is critical in determining a merchandising company's profit and many relevant cost questions related to that profit.
***** Daily Double *****
What is the Cost of Goods Sold and Gross Profit calculation?
300
This inventory system is primarily used in our textbook in accounting for retail and/or merchandising businesses.
What is the Periodic Inventory system?
300
The ending inventory count that was understated by $10,000 has this effect on Cost of Goods Sold.
**** Daily Double *****
What is overstated (too high) by $10,000?
300
The inventory method that divides the Total Cost of Inventory Purchased for the period by the total units available to arrive at a cost used to value both the units sold and the units remaining in inventory.
What is Weighted Average?
300
Utilizes the Cost of Goods Sold calculation to estimate inventory when necessary.
What is the Gross Profit Method of estimating inventory?
400
A company may get 4 different answers to a question about gross profit and they can all be right.
What is.....True?
400
This inventory system requires that 2 journal entries be made when merchandise is sold.
What is the Perpetual Inventory system?
400
If an ending inventory count is incorrect in one year and is not caught the next year, the status of the owner's capital account at the end of the second will be this if the incorrect count was the only error.
What is correct?
400
The inventory method that assumes the oldest inventory was sold first which leaves the newest inventory value in inventory.
What is First In First Out (FIFO)?
400
A necessary relationship for the Gross Profit Method of Estimating Inventory to be appropriate.
*** Daily Double ***
What is the fact that a firm's normal gross profit as a percentage of net sales must have been relatively stable over time?
500
This is done at the end of an accounting period at least once per year.
What is taking a Physical Inventory? (counting the stuff).
500
This is necessary when the physical inventory count total is less than the amount reflected in the books.
What is a journal entry to reflect the loss of the inventory?
500
In a situation where inventory is sent from one company to another company's warehouse on consignment, this company counts the inventory as theirs.
What is the consignor?
500
This is true regarding the physical flow of inventory as it relates to the "assumed" flow.
What is "the assumed cost flows are not required to reflect the actual physical movement of goods within the company".
500
A variation of the Gross Profit Method that can be used by retail businesses to calculate estimated cost of goods sold and ending inventory values.