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When preparing a merchandise purchase budget the required purchase in units equals?
budgeted unit sales - beginning merchandise inventory + desired merchandise ending inventory.
The ending merchandise inventory for a period is the same as beginning inventory of which period?
For the following period.
What adjusting entry is entered on a work sheet when the ending merchandise inventory is less than the beginning value?
Merchandise Inventory. The value of merchandise in the trial balance is the amount of inventory on hand at the beginning of the year. No other transactions are posted to this account during the year because every time merchandise if purchased, it is debited to Purchases. Every time inventory is sold, it is credited to Sales.
If ending merchandise inventory is overstated?
An overstatment of year-end inventory results in an increase in the gross margin (sales - cost of sales). overstating ending inventroy understates cost of sales
What does is mean by cost of goods sold?
COGS. An income statement figure which reflects the cost of obtaining raw materials and producing finished goods that are sold to consumers. Cost of Goods Sold = Beginning Merchandise Inventory + Net Purchases of Merchandise - Ending Merchandise Inventory.
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
What is the difference between ending inventory using LIFO and ending inventory using FIFO referred to as?
LIFO Reserve
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.
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
What is the inventory turnover ratio?
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory and Average Inventory = ( Beginning Inventory + Ending Inventory ) / 2
The inventory turnover ratio is calculated by dividing cost of goods sold by?
ending inventory
