Understanding the Periodic Inventory Method: Calculation, Cost

School: Central Academy - Course: SCIENCE ??? - Subject: Accounting

Under the periodic method of inventory, the acquisition of inventory is recorded in the: Select one: a. Purchases (expense) account at the selling price (i.e. the price the business sells the goods to customers) b. Inventory (asset) account at the selling price (i.e. the price the business sells the goods to customers) c. Purchases (expense) account at cost price Correct Correct d. Inventory (asset) account at cost price Question 2 Correct Mark 1.00 out of 1.00 Flag question Question text The Periodic Inventory Method records an entry in the Cost of Goods Sold (COGS) account at the time of sale. Select one: True False Correct Question 3 Correct Mark 1.00 out of 1.00 Flag question Question text Under the Periodic Inventory Method, a stocktake is necessary to calculate the closing stock value and Cost of Goods Sold. Select one: True Correct False Question 4 Correct Mark 1.00 out of 1.00 Flag question Question text Cost of Goods Sold is calculated as: Select one: a. Opening Inventory minus Purchases minus Closing Inventory b. Opening Inventory plus Purchases plus Closing Inventory c. Opening Inventory plus Sales minus Purchases minus Closing Inventory d. Opening Inventory plus Purchases minus Closing Inventory Correct Correct Question 5 Correct Mark 1.00 out of 1.00 Flag question Question text Cost of Goods Sold is deducted from which account to determine Gross Profit? Select one: a. Sales Correct Correct b. Cost of Goods Available for Sale c. Purchases d. Closing Inventory Question 6 Correct Mark 1.00 out of 1.00 Flag question Question text Assuming the Periodic Inventory Method is used, if sales are $70,000, purchases $30,000, opening inventory $5,000 and the closing inventory $7,000, what is the Gross Profit? Select one: a. $30,000 b. $42,000 Correct Correct c. $28,000 d. $40,000 Question 7 Correct Mark 1.00 out of 1.00 Flag question Question text Assume that the Periodic Inventory Method is used. Cost of goods sold is $100,000, opening inventory $30,000 and closing inventory is $35,000. What is the amount of purchases for the year? Select one: a. $95,000 b. $100,000 c. $105,000 Correct Correct d. $110,000