Module 9

Question 1

What is Inventory?

Answer 1

Goods that are waiting to be sold

Question 2

What do Manufacturers have in inventory?

Answer 2

Raw Materials, WIP and Finished Goods

Question 3

What do Merchandisers have in inventory?

Answer 3

Inventory

Question 4

Journal Entry: returned for credit within the discount period (Seller)

Answer 4

Dr Sales Returns, Cr A/R

Question 5

Journal Entry: returned for credit within the discount period (Buyer)

Answer 5

Dr A/P, Cr Purchase Returns

Question 6

Journal Entry: Apply a Sales Discount (Seller)

Answer 6

Dr Cash, Dr Sales Discount, Cr A/R

Question 7

Journal Entry: Apply a Sales Discount (Buyer)

Answer 7

Dr A/P, Cr Discount, Cr Cash

Question 8

PRA

Answer 8

Purchase Returns and Allowances

Question 9

PD

Answer 9

Purchase Dsicounts

Question 10

How do we calculate Net Purchases?

Answer 10

GP + TI - PRA - PD

Question 11

How do we calculate Ending Inventory?

Answer 11

(OI + NP) - COGS

Question 12

How do we calculate COGS?

Answer 12

(OI + NP) - EI

Question 13

How do we calculate Merchandise Available for Sale?

Answer 13

OI + Purchases

Question 14

Where does unsold MAFS go?

Answer 14

Balance Sheet as Inventory

Question 15

Where does sold MAFS go?

Answer 15

Income Statement as COGS