Week 3 RA - Week Three Decision Case Complete Decision Case...

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Week Three Decision Case Complete Decision Case 1 on page 344 and submit to your instructor. 1. The type of inventory system that I would use is the perpetual inventory system because it keeps a running record of inventory and cost of goods sold. This system achieves control over the inventory. In this system a business counts inventory at least once a year. Physically counting establishes the correct amount of ending inventory for the financial statements and also serves as a check on the perpetual records. 2. Show how to compute net purchases and net sales? And how will you treat the cost of transportation-in? To compute net purchases and net sales is (Inventory- Purchase returns and allowances – Purchas discounts + fright in = Inventory) (Sales revenue- Sales returns and allowances- Sales discounts = Net sales Revenue) The freight in is the transportation cast on purchased goods. The freight in charges increase the net cost of the inventory. The freight in charges are paid by the
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This note was uploaded on 09/15/2011 for the course ACCOUNTING ACC 205 taught by Professor Stephenrussell during the Fall '11 term at Ashford University.

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Week 3 RA - Week Three Decision Case Complete Decision Case...

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