Under a perpetual inventory system, which accounts are debited each time a sale on
account is made?
a) Accounts Payable and Purchases
b) Accounts Receivable and Cost of Goods Sold
c) Inventory and Cost of Goods Sold
d) Accounts Receivable and Purchases
The acquisition cost of a certain raw material changes frequently. The carrying value of
the inventory of this material at year end will be the same if perpetual records are kept
as it would be under a periodic inventory method only if the carrying value is computed
under the
a) weighted-average method.
b) moving average method.
c) FIFO method.
d) None of these are correct.
Which of the following items should be included in a company's inventory at the
statement of financial position date?
a) Goods in transit which were purchased f.o.b. shipping point
b) Goods received from another company for sale on consignment
c) Goods sold to a customer that are being held for the customer to call for at his or
her convenience
d) Goods sold to a customer that were shipped f.o.b. shipping point
Where should goods in transit that were recently purchased f.o.b. destination be included on the
statement of financial position?
a) Accounts payable
b) Inventory
c) Not reported
d) On the income statement
