BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

It is the last day of the fiscal period and your business shut down to complete an end-of-fiscal period inventory count. What inventory amount should go on the balance sheet?

A	Predicated inventory
B	Perpetual inventory
C	Skewed inventory
D	Periodic inventory

Explanation:

Detailed explanation-1: -A periodic inventory system is a form of inventory valuation where the inventory account is updated at the end of an accounting period rather than after every sale and purchase.

Detailed explanation-2: -Ending inventory is the value of goods available for sale at the end of an accounting period. It is the beginning inventory plus net purchases minus cost of goods sold. Net purchases refer to inventory purchases after returns or discounts have been taken out.

Detailed explanation-3: -In the first adjusting entry (to remove the beginning inventory), debit Income Summary and credit Merchandise Inventory. In the second adjusting entry (to enter the ending inventory), debit Merchandise Inventory and credit Income Summary.

There is 1 question to complete.