Accounting Chapter 19

What financial statements show the merchandise inventory

• income statement

• balance sheet

• stockholder's equity

• income statement and balance sheet

Merchandise inventory that is small than needed may

• increase net income

• decrease net income

When a business orders small quantities of an item, the price paid is often

• lower per unit than when ordering larger quantities.

• higher per unit than when ordering larger quantities.

A periodic inventory is usually taken:

• once a week

• once a month

• at the end of the fiscal period

Business establish their fiscal period to end when:

• inventory is higher

• inventory is lower

Perpetual inventory systems provide fiscal period information about:

• quantity of merchandise on hand

• value of merchandise on hand

• quality of merchandise on hand

• both quantity and value of merchandise on hand

Ending inventory and cost of merchandise sold are calculated using the same unit price under weighted average method.

• True

• False

The cost of merchandise sold can be calculated by:

• subtracting the cost of merchandise available for sale from cost of ending inventory

• subtracting the cost of ending inventory from cost of merchandise available for sale

Business need an inventory amount for preparing income statements should take a physical inventory

• each week

• each month

• end of fiscal year

A merchandise inventory determined by counting, weighting, or measuring items of merchandise on hand.

• Periodic inventory

• Perpetual inventory