REVIEW - CHAPTER 5 Periodic vs. Perpetual Periodic =...

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CHAPTER 5 Periodic vs. Perpetual Periodic = inventory checked by hand at the beginning and end of the period. Perpetual = inventory taken as items are purchased; bar codes Recording Sales of Merchandise Accounts Receivable 500 Sales Revenue 500 Cost of Goods Sold 200 Inventory 200 CHAPTER 6 Importance of Valuing Inventory Correctly If using the wrong info for inventory, you can end up with an erroneous inventory count or value and this can screw up the income statement and balance sheet C of GS (periodic) = beginning invent. + C of G Purchased – ending invent. Weighted Avg. weighted unit cost = total price/total # units End. Invent = weighted unit cost X # of units C of GS = total price – end. Invent. Specific identification number—like cars with VIN. LIFO = higher CofGS, lower invent. lower gross profit = lower income FIFO = lower CofGS, higher invent. higher gross profit = higher income Weighted Avg. = middle CofGs and invent. Most consistent. Specific Identification = varied
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This note was uploaded on 11/21/2011 for the course BUS 214 taught by Professor Waker during the Winter '08 term at Cal Poly.

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REVIEW - CHAPTER 5 Periodic vs. Perpetual Periodic =...

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