Under a periodic inventory system, cost of goods sold is a residual amount. purchases of inventory are recorded in an inventory account. cost of goods sold is determined with every sale. inventory over and short is reported.
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A periodic inventory system updates inventory counts and cost of goods sold only at the end of a period (e.g., monthly, quarterly, annually). It does not track inventory levels continuously. Show more…
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Sales during the year were 700 units. Beginning inventory was 400 units at a cost of $10 per unit. Purchase 1 was 500 units at $12 per unit. Purchase 2 was 300 units at $14 per unit. Required: a. Assume the periodic inventory system is used. Calculate cost of goods sold and ending inventory using FIFO method. (Enter all values as a positive value.) Periodic FIFO Cost of Goods Sold Inventory Balance Cost of Goods Available for Sale # of units Cost of Goods # of units Cost per Cost of Cost per # of Cost per Available for Goods Sold in ending unit sold unit units Sale Beg. inventory Purchases: Purchase 1 Purchase 2 Total b. Assume the periodic inventory system is used. Calculate cost of goods sold and ending inventory using LIFO method. (Enter all values as a positive value.) Periodic LIFO Cost of Goods Sold Inventory Balance Cost of Goods Available for Sale Cost per Ending Periodic LIFO Cost per Cost of Cost of Goods # of units unit Cost per Available for sold unit # of units unit Sale Beg. inventory Purchases: Purchase 1 Purchase 2 Total
Akash M.
The primary difference between the periodic and perpetual inventory systems is that a a. periodic system provides an easy means to determine inventory shrinkage b. periodic system keeps a record showing the inventory on hand at all times c. periodic system records the cost of the sale on the date the sale is made d. periodic system determines the inventory on hand only with a physical count at the end of the accounting period
Yujie W.
If inventory is understated at the end of the accounting period, the effect will be which of the following: a. Cost of goods sold will be overstated and profit will be understated b. Cost of goods sold will be understated and profit will be overstated c. Cost of goods sold will be overstated and profit will be overstated d. Cost of goods sold will be understated and profit will be understated
Aparna S.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
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