7.2 Perpetual Inventory

Question 1

Perpetual Inventory

Answer 1

Provides up-to-date information about the inventory.

As goods are received, they are entered into the inventory system, as they are sold the POS system takes them out.

Two part entry every time.

No Purchases Account necessary

Question 2

What is still needed in perpetual inventory

Answer 2

Still need periodic inventory checks for damaged/stolen items.

Question 3

Lost, Stolen, Damaged?

Answer 3

Debit loss on inventory or shrinkage and credit inventory

Question 4

Goods that cost $100 are sold for $150.

Answer 4

Debit bank and COGS and credit inventory and sales

Question 5

COST ACCOUNTING

Answer 5

area of accounting that focuses on determining, controlling, and reporting the costs of doing business

Cost of Goods Manufactured is a detailed calculation, usually done on a separate statement and only the final amount appears on the Income Statement.