ACC 291T PRINCIPLES OF
ACCOUNTING II WEEK 3
QUIZZES AND EXERCISES |
QUESTIONS AND ANSWERS | 2026
UPDATE | WITH COMPLETE
SOLUTIONS.
A perpetual inventory system is most often used when: - answer- Inventory has a small
number of items with relatively high value
A periodic inventory system is most often used when: - answer- Inventory has a large
number of items with relatively low value
The perpetual method of accounting for inventory: - answer- Allows management to
better estimate inventory losses from pilferage than does a periodic inventory method
If a company sold merchandise for a profit, the accounting equation would show a(n): -
answer- Net increase in assets and increase in revenues
With a periodic inventory system, inventory-related data can be used to compute an
estimate of what ending inventory should be before an ending inventory count is made.
What is the correct calculation of this estimate of ending inventory? - answer- Cost of
goods available for sale minus cost of goods sold
For external reporting purposes, inventory shrinkage is usually combined with which
account? - answer- Cost of goods sold
A physical count would be necessary at the end of the accounting period under which
inventory system? - answer- Both periodic and perpetual inventory systems
Under which inventory system would a company NOT be able to specifically determine
the amount of inventory lost or stolen? - answer- Periodic inventory system
If expenses are overstated on the income statement, net income: - answer- Will be
understated
ACCOUNTING II WEEK 3
QUIZZES AND EXERCISES |
QUESTIONS AND ANSWERS | 2026
UPDATE | WITH COMPLETE
SOLUTIONS.
A perpetual inventory system is most often used when: - answer- Inventory has a small
number of items with relatively high value
A periodic inventory system is most often used when: - answer- Inventory has a large
number of items with relatively low value
The perpetual method of accounting for inventory: - answer- Allows management to
better estimate inventory losses from pilferage than does a periodic inventory method
If a company sold merchandise for a profit, the accounting equation would show a(n): -
answer- Net increase in assets and increase in revenues
With a periodic inventory system, inventory-related data can be used to compute an
estimate of what ending inventory should be before an ending inventory count is made.
What is the correct calculation of this estimate of ending inventory? - answer- Cost of
goods available for sale minus cost of goods sold
For external reporting purposes, inventory shrinkage is usually combined with which
account? - answer- Cost of goods sold
A physical count would be necessary at the end of the accounting period under which
inventory system? - answer- Both periodic and perpetual inventory systems
Under which inventory system would a company NOT be able to specifically determine
the amount of inventory lost or stolen? - answer- Periodic inventory system
If expenses are overstated on the income statement, net income: - answer- Will be
understated
