Show:
Managing Inventories
Inventory Costing Methods
Merchandising companies- Inventory systems
100
Which of the following is an inventory processing system? Perpetual, LIFO, Lower of cost or market, Average cost
Perpetual
100
All of the following are inventory costing methods except FIFO, Average cost, periodic, specific identification
periodic
100

Provides up-to-date information on ending inventory and cost of goods sold.

Perpetual Inventory System

200

Name the two inventory processing systems

Periodic and perpetual

200

Automobiles dealers probably would use which inventory method?

specific identification

200

Sellers pays for shipping, and designating the transfer of ownership at the buyer's place of business.

FOB destination

300
Under which inventory system must you calculate a new balance after each sale?
Perpetual
300

Major advantage of this method is not having to track the individual items of inventory

Average cost

300

What is the account used to record purchases discounts for early payments  under perpetual inventory system?

Merchandise Inventory

400
Under which inventory process does the timing of sales not matter?
Periodic
400

using this method inventory is valued at most current cost and cost of goods sold is valued at the oldest inventory cost

FIFO

400

The freight out cost regarding sales transactions is presented in a separate account. Where is that account presented on Financial statements?

Income Statement- Delivery expense

500
What is the equation to calculate cost of goods sold?
Cost of goods available for sale - ending inventory = cost of goods sold
500

What is the equation to calculate the average cost when using the average costing method under the periodic system?

Cost of goods available for sale divided by total units available for sale

500

What is the equation to calculate cost of goods available for sale under periodic inventory system?

Beginning inventory+ Net purchases + Freight In

Net purchases= Purchases - Purchase returns& allowances- Purchase discounts