Ch 9 Sec 2 Review

What is the main characteristic of perpetual inventory?

• Evaluated at the end of the fiscal period

• Uses physical inventory

• Continuous record of increases and decreases

• Done once a month, quarter, or year

What type of inventory is evaluated at the end of the fiscal period?

• Perpetual Inventory

• Periodic Inventory

• Computerized Inventory

• Bar Code Inventory

What is the normal balance side of the 'Purchases account'?

• Credit

• Debit

• Neutral

• Both sides

What is the primary purpose of the Cost of Goods Sold?

• To account for all costs necessary to make an item available for sale

• To calculate profit margins

• To determine tax liabilities

• To set retail prices

Why is management approval necessary in the requisition process?

• To ensure budget compliance

• To expedite shipping

• To confirm supplier details

• To finalize payment terms

What is a potential cost benefit of online ordering?

• Higher purchase prices

• More discounts off purchase price

• Increased shipping costs

• Longer delivery times

Which of the following is a key component of a purchase invoice?

• Employee's salary

• Total amount of purchase

• Customer feedback

• Shipping method

What does the description in a purchase invoice refer to?

• The supplier's address

• The details of each item

• The payment terms

• The shipping method

What is the significance of the quantity in a purchase invoice?

• It determines the shipping method

• It affects the total amount of purchase

• It indicates the delivery date

• It shows the supplier's rating

What does the term "no discount" imply in the context of a purchase invoice?

• A discount is available

• No discount is applied to the invoice

• A future discount is promised

• A discount is applied after payment