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88 if a company were using a periodic inventory

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88)If a company were using a periodic inventory system, which of the following entries is thecorrect journal entry to record the purchase of $20,000 of merchandise on account?A.Dr. Inventory20,000Cr. Accounts payable20,000B.Dr. Inventory20,000Cr. Purchases20,000C.Dr. Purchases20,000Cr. Inventory20,000D.Dr. Purchases20,000Cr. Accounts payable20,000A)Choice AB)Choice BC)Choice CD)Choice D88)
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89)Seinerfeld Company had its merchandise inventory warehouse destroyed by a fire.Thankfully, the owner had the accounting records at home to prepare financialstatements after counting the inventory earlier in the day. The company used the periodicinventory system. In the shock of being notified of the fire, the owner spilled his dinneron the statement of earnings he had just completed. However, the following informationwas readable: Sales, $200,000; Beginning Inventory, $20,000; Purchases, $130,000;Total Operating Expenses (not including taxes), $40,000; and Profit Before Taxes,$20,000. There were no sales returns, purchases returns, sales discounts nor purchasesdiscounts. Compute the amount of the ending inventory on hand before the fire.89)
90)The lower of cost and net realizable value basis of valuing inventories ensures thatinventories are90)
TRUE/FALSE.Write 'T' if the statement is true and 'F' if the statement is false.91)When ending inventory is smaller than beginning inventory, gross margin is less than, ifending inventory were larger than beginning inventory (assuming purchases remainconstant).91)92)The cost of goods purchased for resale should include all amounts that are theresponsibility of the purchaser for freight and handling charges in order to get the goodsto the purchaser's intended location.92)93)In conformity with the matching process, the total cost of sales during the period must berelated to the sales revenue earned during the period.93)94)Ownership of goods passes from the seller to the buyer after the buyer has paid for thegoods.94)95)If transportation costs are the responsibility of the buyer, they should be added to the costof purchases for the period.95)96)An error in the measurement of ending inventory affects the cost of sales on the currentperiod's statement of earnings and ending inventory on the statement of financialposition.96)97)Inventory is a tangible asset purchased for use in the company's operations.97)16
98)A manufacturing company uses three different inventory accounts to track their productcosts.98)99)An error in the ending inventory of the current period will have a similar but inverseeffect on profit of the next accounting period.99)100)An error that overstates the ending inventory will cause profit for the period to beunderstated.

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Term
Fall
Professor
Clark
Tags
Beginning Inventory, a Dr Inventory, Shilling Company, B Dr Inventory

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