ACG 2021 Patterson Exam 3 Questions and Correct Answers
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Course
ACG 2021
Institution
ACG 2021
Determining inventory quantities with a perpetual inventory system 1. Check accuracy of inventory records 2. Determine amount of inventory lost due to wasted raw materials, shoplifting, employee theft, etc.
Determining inventory quantities with a periodic system 1. Determine the inventory on hand ...
ACG 2021 Patterson Exam 3 Questions
and Correct Answers
Determining inventory quantities with a perpetual inventory system ✅1. Check
accuracy of inventory records
2. Determine amount of inventory lost due to wasted raw materials, shoplifting,
employee theft, etc.
Determining inventory quantities with a periodic system ✅1. Determine the inventory
on hand
2. Determine the cost of goods sold for the period
Inventory held by merchandising companies ✅merchandise inventory which is held
and available for sale
Inventory held by manufacturing companies ✅raw materials, work in progress, and
finished goods
FOB shipping point ✅buyer pays the freight cost, ownership of the goods transfers to
the buyer once the goods are in transit
FOB destination ✅seller pays the freight cost, ownership stays with the seller until the
goods reach their final destination
Process of selling goods on consignment ✅consignee tries to sell the goods for the
consigner (for a commission fee) but without taking ownership of the goods
Ending inventory equation ✅ei = beginning inventory + net purchases - cost of goods
sold
Specific identification method ✅actual physical flow costing method in which items still
in inventory are specifically costed to arrive at the total cost of the ending inventory
FIFO (first in, first out) ✅costs of the earliest goods purchased are the first to be
recognized in determining costs of goods sold
Results of rising prices, using the FIFO method ✅-high net income
-high ending inventory
-high gross profit
-low cost of goods sold
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