sales] can be used to estimate the cost ofgoods soe multiplying the he retail in
ID: 2582359 • Letter: S
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sales] can be used to estimate the cost ofgoods soe multiplying the he retail inventory method requires keeping records of both the cost and selling (retail) prices bctache The percentage of total goods available for sale at cost divided by the total goods availabl purchased. The retail is used to estimate cost of goods sold and ending inventory. ) prices c gross profit percentage by the net sales and subtrictig REVIEW QUESTIONS uctions: Analyze each of the following items carefully before writing your answer in the c right Answer Question LO . Understating the ending inventory for the year 20-1 will cause net income for the year 20-1 to be 2. Overstating the ending inventory for the year 20-1 will cause net 3. The two principal systems of accounting for inventory are the LO I income for the year 20-2 to be o 2017 Cengage Lcaming. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible websExplanation / Answer
1) Understated Understated ending inventory results in understated net income. 2) Overstated Overstated ending inventory results in overstated net income 3) periodic system and perpetual system The two principal systems of accounting for merchandise inventory— the periodic system and the perpetual system. 4) Perpetual System 5) Physical Inventory Counting the goods on hand at the end of the period 6) natural business year A fiscal year that starts and ends when inventory is at its lowest level is known as natural business year 7) Inventory Record 8) Free on Board Free on Board Shipping Point means that the buyer takes delivery of goods being shipped to it by a supplier once the goods leave the supplier's shipping dock 9) Destination FOB - Destination -The seller should be responsible for transporting the goods until they reach the buyer's unloading dock. 10) Specific Identification Method First-In, First-Out (FIFO) Method Weighted-Average Method Last-In, First-Out (LIFO) Method
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