ACCT 301 EXAM 3 QUESTIONS WITH VERIFIED
ANSWERS
Inventory refers to - Answers - the assets a company:
-Intends to sell in the normal course of business
-Has in production for future sale or
-Uses currently in production of goods to be sold
what is the expense related to inventory - Answers - Cost of goods sold
Merchandising Inventory - Answers - Goods that are purchased primarily in finished
form from wholesalers and retailers
Cost of merchandise inventory includes: - Answers - Purchase price plus
Any other costs necessary to get goods in condition and location for sale
Manufacturing Inventory - Answers - Goods that are produced by a manufacturing
company to be sold to wholesalers, retailers, or other manufacturers
manufacturing inventory consists of - Answers - Consists of:
Raw materials
Work-in-process
Finished goods
raw materials - Answers - Represent the cost of components purchased from other
manufacturers that will become part of the finished product
Example: Computer chips and memory modules that will go into computers produced by
HP
work in process - Answers - Refers to the products that are not yet complete
Example: Partially completed components in the assembly lines of HP
finished goods - Answers - Cost of goods that have been completed in the
manufacturing process but have not been sold
Example: Computers produced by HP that are intended for sale to customers
Manufacturing companies generally disclose inventories where - Answers - either in a
note or directly in the balance sheet, the dollar amount of each inventory category.
, perpetual inventory system - Answers - Continually adjust the inventory account for
each change in inventory caused by a:
Purchase, Sale, or Return of merchandise by the company to its supplier
Continually adjust the cost of goods sold account each time goods are:
Sold or Returned by a customer
what does the perpetual system allow management to do - Answers - Determine goods
on hand on any date
Determine the number of items sold during a period
periodic inventory system - Answers - Adjusts the inventory account and records cost of
goods sold only at the end of each reporting period
Records merchandise purchases, purchase returns, purchase discounts, and freight-in
in temporary accounts
how is cost of goods sold determined under periodic - Answers - begininning inventory
+net purchases - ending inventory
The Golson Company uses the periodic inventory system. Information for 2018 is as
follows:
Sales $1,325,000
Begin inventory 340,000
Purchases 600,000
Purchase returns 6,000
End inventory 370,000
Cost of goods sold for 2018 is:
a. $761,000
b. $594,000
c. $570,000
d. $564,000 - Answers - d. $564,000
The correct answer is d: Cost of goods sold = $564,000.
$340,000 (begin inventory)
+ 600,000 (purchases)
− 6,000 (purchase returns)
− 370,000 (ending inventory)
= $564,000 (cost of goods sold)
The Golson Company uses the periodic inventory system. Information for 2018 is as
follows:
ANSWERS
Inventory refers to - Answers - the assets a company:
-Intends to sell in the normal course of business
-Has in production for future sale or
-Uses currently in production of goods to be sold
what is the expense related to inventory - Answers - Cost of goods sold
Merchandising Inventory - Answers - Goods that are purchased primarily in finished
form from wholesalers and retailers
Cost of merchandise inventory includes: - Answers - Purchase price plus
Any other costs necessary to get goods in condition and location for sale
Manufacturing Inventory - Answers - Goods that are produced by a manufacturing
company to be sold to wholesalers, retailers, or other manufacturers
manufacturing inventory consists of - Answers - Consists of:
Raw materials
Work-in-process
Finished goods
raw materials - Answers - Represent the cost of components purchased from other
manufacturers that will become part of the finished product
Example: Computer chips and memory modules that will go into computers produced by
HP
work in process - Answers - Refers to the products that are not yet complete
Example: Partially completed components in the assembly lines of HP
finished goods - Answers - Cost of goods that have been completed in the
manufacturing process but have not been sold
Example: Computers produced by HP that are intended for sale to customers
Manufacturing companies generally disclose inventories where - Answers - either in a
note or directly in the balance sheet, the dollar amount of each inventory category.
, perpetual inventory system - Answers - Continually adjust the inventory account for
each change in inventory caused by a:
Purchase, Sale, or Return of merchandise by the company to its supplier
Continually adjust the cost of goods sold account each time goods are:
Sold or Returned by a customer
what does the perpetual system allow management to do - Answers - Determine goods
on hand on any date
Determine the number of items sold during a period
periodic inventory system - Answers - Adjusts the inventory account and records cost of
goods sold only at the end of each reporting period
Records merchandise purchases, purchase returns, purchase discounts, and freight-in
in temporary accounts
how is cost of goods sold determined under periodic - Answers - begininning inventory
+net purchases - ending inventory
The Golson Company uses the periodic inventory system. Information for 2018 is as
follows:
Sales $1,325,000
Begin inventory 340,000
Purchases 600,000
Purchase returns 6,000
End inventory 370,000
Cost of goods sold for 2018 is:
a. $761,000
b. $594,000
c. $570,000
d. $564,000 - Answers - d. $564,000
The correct answer is d: Cost of goods sold = $564,000.
$340,000 (begin inventory)
+ 600,000 (purchases)
− 6,000 (purchase returns)
− 370,000 (ending inventory)
= $564,000 (cost of goods sold)
The Golson Company uses the periodic inventory system. Information for 2018 is as
follows:
