6

Question 1

What does FIFO mean?

Answer 1

First-In, First-Out: oldest inventory is sold first

Question 2

What are the 4 inventory terms to calculate?

Answer 2

Beginning Inventory + Purchases = COGA = COGS + Ending Inventory

Question 3

Journal entry for a sale (2 parts)?

Answer 3

1. Debit Cash/AR, Credit Sales
2. Debit COGS, Credit Inventory

Question 4

Journal entry for a purchase?

Answer 4

Debit Inventory, Credit Cash/Accounts Payable