Inventory accounting Manufacturing/Merchandising. How would a company record freight-outexpenses of inventory (already made/produced) sold to its buyer. I am thinking operating expenses, butcould these costs be capatalized to the inventory account? I do not recall this being the way to recordthese expenses (taught in university)

Instead of being capitalized to the inventory account, freight-out costs associated with inventory…

Answered: Inventory accounting…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 23CE: Inventory Costing: LIFO Refer to the information for Filimonov Inc. and assume that the company uses...

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Why do companies adopt the LIFO method of inventory costing? Your discussion should include the effects on the income statement and balance sheet.
Journal entries for recording revenue and costs for service provider. For a traditional inventory-carrying companies, recording journal entries for revenue and costs is something like the following: Dr. Cash $100 Cr. Revenue $100 Dr. Cost of goods sold $50 Cr. Inventory $50 How does the journal entry work for service companies such as SaaS firms that do not carry inventory?
1. What kind of inventory system most applicable to sari-sari stores? A. Merchandise Inventory B. Merchandisers C. Perpetual Inventory system D. Periodic Inventory System 2. What accounting term is used for the cost of goods unsold at the end of the accounting period? C. Perpetual Inventory D. Periodic Inventory A. Cost of Goods Unsold B. Merchandise Inventory 3. Cost of Goods Sold (COGS) includes the following EXCEPT: A. Factory overhead expenses. B. The cost of storing products the business sells. C. Indirect labor costs for workers who produce the products D. The cost of products or raw materials, including freight or shipping charges. 4. The following are COGS formula to found in the cost of goods sold during an accounting period A. Gross Income= Gross Revenue-COGS B. Net Income+ Revenue-COGS- Expenses C. Beginning Inventory+ Purchases During the Period-Ending Inventory. D. Beginning Inventory – Purchase Return and Allowances - Ending Inventory. 5. Which of the following statement…
In comparing the accounts of a merchandising company with those of a service company, what additional accounts would the merchandising company likely use, assuming it employs a perpetual inventory system? Which financial statements would these accounts appear on?
1. What kind of inventory system most applicable to sari-sari stores? C. Perpetual Inventory system D. Periodic Inventory System A. Merchandise Inventory B. Merchandisers 2. What accounting term is used for the cost of goods unsold at the end of the accounting period? A. Cost of Goods Unsold B. Merchandise Inventory C. Perpetual Inventory D. Periodic Inventory 3. Cost of Goods Sold (COGS) includes the following EXCEPT: A. Factory overhead expenses. B. The cost of storing products the business sells. C. Indirect labor costs for workers who produce the products D. The cost of products or raw materials, including freight or shipping charges. 4. The following are COGS formula to found in the cost of goods sold during an accounting period A. Gross Income= Gross Revenue-COGS B. Net Income+ Revenue-COGS- Expenses C. Beginning Inventory+ Purchases During the Period-Ending Inventory. D. Beginning Inventory – Purchase Return and Allowances - Ending Inventory. 5. Which of the following statement…
What is the main source of income for a buying and selling company? 2. Between the operational cycle of a service company and a buying and selling company, which is the longest? 3. What inventory systems do you know are used in a buying and selling business? 4. What are the important factors in using a perpetual inventory system? 5. In which financial statement is the inventory account balance presented? 6. Mention the two forms of Income and Expense Statement that can be used. 7. Indicate the effects of inventory errors on the financial statements 8. What are the methods used to determine the cost of goods?
In comparing the accounts of a merchandising company with those of a service company, what additional accounts would the merchandising company likely use, assuming it employs a perpetual inventory system?
The hypothetical flow is one of the methods used to determine the cost of inventory and the cost of goods sold, and assuming that the company uses the perpetual inventory system, discuss this method in detail, supporting your answer with a practical example to determine the cost of goods sold and the cost of inventory and the reasons for the difference in results for each method (FIFO, LIFO?
Select all that apply Determine which of the following statements are correct regarding the difference between physical flow and the cost flow of inventory Check all that apply) A business may adopt any cost flow assumption when accounting for perishable sems Perishable-items Usually have an actual physical flow of FIFO Penshable items neve an actual physical flow of LIFO Cost flow in an assumption about which goods/items are sold Physical flow refers to the actual movement of goods
Hello! I need help with the following accounting questions where it asks to calculate the ending inventory and the cost of goods sold through the average-cost method. Thank you!
Various inventory methods including FIFO, LIFO, and average cost provide a process to identify raw materials, work-in-process, and finished goods. Discuss the benefits of using one method verses the other and their effect on the income statement. Does a company decide, based on taxes, which method to use or are there other determinants that are more important in your opinion? Provide details explaining your opinion in your discussion.
Describe the accounting treatment of inventory in business. What are the different methods used to value inventory, and how do they impact the financial statements? How does the accounting treatment of inventory differ between manufacturing and merchandising businesses?

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