When goods are purchased for resale by a business using a periodic inventory

When goods are purchased for resale by a business

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When goods are purchased for resale by a business using a periodic inventory system: (a) purchases on account are debited to inventory.(b) purchases on account are debited to purchases.(c) purchase returns are debited to purchase returns and allowances.(d) freight costs are debited to purchases. CHAPTER 5 Reporting and analysing inventory 319 Copyright © ${Date}. ${Publisher}. All rights reserved.
5.2LO2In determining cost of sales: 5.3LO2If beginning inventory is $60 000, cost of goods purchased is $380 000, and ending inventory is$50 000, what is cost of sales? 5.4LO3Which of the following should not be included in the physical inventory of an entity? 5.5LO5Lim Ltd has the following units and costs:UnitsUnit costInventory, 1 Jan.8 000$11Purchase, 19 June13 00012Purchase, 8 Nov.5 00013If 9000 units are on hand at 31 December, what is the cost of the ending inventory under FIFO? (a) $99 000.(b) $108 000.(c) $113 000.(d) $117 000. 5.6LO5From the data in question 5.5, what is the cost of the ending inventory under LIFO? 5.7LO6In periods of rising prices, LIFO will produce: 5.8LO6Considerations that affect the selection of an inventory costing method include: 5.9LO7Which of the following events could result in the cost of an item of inventory being higher than itsnet realisable value? (a) Inventory obsolescence.(b) A fall in the demand for inventory.(c) Water or fire damage to inventory.(d) All of the above. 320 Financial accounting: Reporting, analysis and decision making Copyright © ${Date}. ${Publisher}. All rights reserved.
5.10LO8Which of these would cause inventory turnover to increase the most?

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