BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Trade discounts applicable to purchases during the period.
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Cash discounts taken during the period.
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Purchase returns and allowances of merchandise during the period.
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Cost of transportation in for merchandise purchased during the period.
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Detailed explanation-1: -When using the periodic inventory method, which of the following generally would not be separately accounted for in the computation of cost of goods sold? a. neither the buyer’s nor seller’s inventory balance.
Detailed explanation-2: -Answer and Explanation: The correct option is b. purchases. Purchases are measured at the end of each period under the periodic inventory system, not the perpetual inventory system.
Detailed explanation-3: -Purchase account and Purchase return and allowance accounts are the ones that are used in periodic inventory technique only.
Detailed explanation-4: -When the periodic inventory system is in use, the choice of an inventory costing method usually has no impact on gross profit or cost of goods sold. 18. A lower of cost or market write-down would be recorded with a debit to Inventory Expense.
Detailed explanation-5: -The cost of goods available for sale equals the beginning value of inventory plus the cost of goods purchased.