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The inventory turnover is calculated by dividing cost of goods sold by?
ending inventory
An overstatement of ending inventory in one period results in?
An overstatement of ending inventory in one period results in
When calculating prime cost do you use beginning inventory or ending inventory of direct materials?
Total material consumed amount is used for prime cost not opening inventory or ending inventory only.
In a period of rising prices the inventory method which tends to give the highest reported inventory?
Hi - in periods of rising prices, the FIFO (fist in, first out) will give the highest ending inventory. The other two options (LIFO last in first out) will give the lowest ending inventory and the average method will give between the two. Hope this helps!
What temporary accounts are used in the periodic inventory system?
In a periodic inventory system, the main temporary accounts used are Purchases, Purchase Returns and Allowances, and Purchase Discounts. At the end of the accounting period, these accounts are closed to calculate the cost of goods sold by adjusting the Inventory account based on a physical count. The difference between the beginning and ending inventory, along with the purchases, determines the cost of goods sold for the period.
True or false a change in inventories is production minus sales?
False. A change in inventories is the difference between the ending inventory and the beginning inventory, not production minus sales.
Why do income statements for internal purposes differ to published income statements?
The difference in operating income between the two methods is the difference in ending inventory values, which is the fixed overhead costs that have been capitalized as an asset ( inventory ) because overhead costs that have been capitalized as an asset.
The inventory turnover is calculated by dividing cost of goods sold by?
ending inventory
An overstatement of ending inventory in one period results in?
An overstatement of ending inventory in one period results in
When calculating prime cost do you use beginning inventory or ending inventory of direct materials?
Total material consumed amount is used for prime cost not opening inventory or ending inventory only.
In a period of rising prices the inventory method which tends to give the highest reported inventory?
Hi - in periods of rising prices, the FIFO (fist in, first out) will give the highest ending inventory. The other two options (LIFO last in first out) will give the lowest ending inventory and the average method will give between the two. Hope this helps!
How would you verify the ending inventory item in auditing?
ending inventories are verified by comparing purchases and sales. the difference is ending inventories then do a physical count, to make sure that what's on papers are the same compared to the actual inventories on hand.
What temporary accounts are used in the periodic inventory system?
In a periodic inventory system, the main temporary accounts used are Purchases, Purchase Returns and Allowances, and Purchase Discounts. At the end of the accounting period, these accounts are closed to calculate the cost of goods sold by adjusting the Inventory account based on a physical count. The difference between the beginning and ending inventory, along with the purchases, determines the cost of goods sold for the period.
A company's COGS was 4000 Determine net purchases and ending inventory given goods available for sale were 11000 and beginning inventory was 5000?
goods available for sales = beginning inventory + net purchases. So net purchases = 6000 Goods available for sale - ending inventory = COGS So ending inventory = 7000
Which of the followign inventory costing methods uses the costs of the oldest purchases to calculate the value of the ending inventory?
The inventory costing method that uses the costs of the oldest purchases to calculate the value of the ending inventory is the First-In, First-Out (FIFO) method. Under FIFO, it is assumed that the oldest inventory items are sold first, so the ending inventory consists of the most recently purchased items. This method often results in higher ending inventory values during periods of rising prices.
What does open to buy mean?
Open to buy is a method of planning and controlling retail inventory. Calculate your opening inventory balance (in units or dollars), add the in-coming (already ordered) inventory and subtract your projected sales for the period...then compare that number to your desired ending inventory amount...the difference is how much you are open to buy (inventory that should be ordered). So if you start with 100,000 and have 10,000 on order and expect sales to be 40,000 and you want your ending inventory to be 90,000...You are open to buy 20,000 90- (100 + 10 - 40) = 20
The ending merchandise inventory for a period is the same as beginning inventory of which period?
For the following period.
