INTERMEDIATE ACCOUNTING 1 EXAM #3 QUESTIONS AND ANSWERS

INTERMEDIATE ACCOUNTING 1 EXAM
#3 QUESTIONS AND ANSWERS
Inventory - Answer-finished goods, work in process, raw materials (anything used to
make goods to sell)

Perpetual Method journal entry - Answer-Purchase:
Dr. Inventory
Cr. Accounts Payable
Sell/COGS:
Dr. A/R
Cr. Sales
Dr. COGS
Cr. Inventory

Periodic Method Journal entry - Answer-Purchases:
Dr. Purchases
Cr. A/P
Sell/ COGS
Dr. A/R
Cr.

Updating Inventory Perpetual - Answer-No updates needed,
Close sales, COGS, to income summary

Updating Inventory Periodic - Answer-Update Inventory, establish COGS, close out
purchases and related accounts

Purch returns
Purch discounts
Ending Inventory
COGS
Dr. Purch
Dr. Beg Inv
Dr. Freight-in

Close COGS, and sales to Income Sum

FOB "Free on board" shipping point (title changes hands at) - Answer-belongs to buyer

FOB "Free on board" destination (title changes hands at) - Answer-belongs to seller

consignment - Answer-selling goods for someone else is not apart of your inventory