Quiz Ch 06 – Roadway Company & Fedway Company
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
What does FOB destination mean in inventory transactions between Roadway and Fedway Companies?
What does FOB destination mean in inventory transactions between Roadway and Fedway Companies?
Which of the following journal entries was prepared by Seifert Company, which uses the periodic inventory system, on December 31 given the following information: beginning inventory is $7,000, purchases for the period are $102,000, and ending inventory is $18,000?
Ending inventory errors affect two accounting periods.
Delivery expenses are recorded for freight.
To calculate the average cost per unit, divide the cost of goods available for sale by the number of units sold.
The average cost per unit method yields an inventory cost that typically falls between the inventory costs calculated using the LIFO and FIFO methods.
Inventory cost converts from an asset to an expense upon contract fulfillment, delivery to the buyer, and revenue recognition by the seller.
The income statement recognizes the Cost of Goods Sold as an operating expense.
The Inventory account is debited for purchases in the periodic inventory system.
The gross profit percentage is determined by dividing net sales by gross profit.