Quiz Ch 06 – T/F Debiting Inventory for Purchases in Periodic Inventory System
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
The Inventory account is debited for purchases in the periodic inventory system.
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.
The cost of inventory on hand and merchandise sold is determined by conducting a physical inventory count under the periodic inventory system.
Net realizable value is the market value of inventory as defined by IFRS.
The income statement of service entities reflects the cost of goods sold.
The inventory costing method has no effect on a company’s balance sheet.
Inventory loss due to disasters like fire cannot be calculated using the gross profit method.
Estimating ending inventory is possible using the cost-of-goods-sold model.
Gross profit percentage varies greatly year-to-year for most firms.
Given COGS, the historical cost, and net realizable — figure out what the company should report for ending inventory and COGS, along with which statement it would show up on.
Your numbers will vary.