Inventory systems grade 12

When using a perpetual inventory system ,the journal entry for the cost of inventory sold is:

• Debit trading stock , credit cost of sales

• Debit cost of sales; credit sales

• No journal is necessary for the cost of merchandise sold

• Debit cost of sales ,credit inventory

Too much inventory on hand causes

• An increase to the losses caused by price decline

• An increase to the cost of safeguarding assets

• Funds to be tied up that could be used to improve operations

• All of the above

Taking a physical count of inventory

• Is not necessary when periodic inventory system is used

• Has no internal control relevance

• Should be done near year end

• Is not necessary when a perpetual inventory system is used.

FIFO stands for?

(a)  

Cost of goods/cost of sales

• Is revenue generated from selling inventory

• The value of inventory recorded in the inventory cards

• Expenses incurred when inventory is sold

• Net profit minus Expenses

Is the type of businesses that involves buying and selling of goods

• merchandising business

• Service business

• Manufacturing

Inventory is a_____________found on the ______________.

• Current asset , balance sheet

• Liability balance sheet

• Long term asset ,income statement

• Current asset , income statement

Which inventory method continuously updates the inventory account to reflect the value of items on hand?

• Perpertual

• Periodic

What is inventory valuation ?

• The process of determining the value of fixed assets

• The process determining the value of unsold inventory

• The process of determining the value of fixed assets

• The process of determining the value of accounts payable

Why is inventory valuation important for businesses

• To calculate the value of accounts recievable

• To plan for future purchasing

• To calculate the value of accounts payable

• To calculate the value of fixed assets