Answer:
Under a perpetual inventory system, the adjusting entry to account for inventory shrinkage would include <u>C) CREDIT TO INVENTORY</u>
A café that sells smoothies often has fruit that becomes rotten and the employees have to throw it away. What type of system does the café use to count inventory? <u>B) PERIODIC INVENTORY SYSTEM</u>
Samantha is the manager of a sporting goods store. A customer came in to return a fishing reel because the reel did not work properly. In what type of account will Samantha record this transaction? <u>D) CONTRA ACCOUNT</u>
Which accounts are affected in the closing process under a perpetual inventory system? <u>A) INCOME FROM OPERATIONS AND COST OF GOODS SOLD</u>
Game Land is an online video game retailer that sells video games at discounted prices. Because the store is strictly online, it is important that they have all inventory accounted for and up-to-date inventory totals published on their website. Which inventory system is the best choice for Game Land to invest in? <u>C) PERPETUAL INVENTORY SYSTEM</u>
The entry to record the return of $25 of inventory to a supplier under the perpetual inventory system is recorded with a debit to <u>C) ACCOUNTS PAYABLE AND A CREDIT TO INVENTORY. </u>
A furniture company in California needs to purchase wood to build its next line of patio chairs. The purchasing manager is looking into purchasing timber from a company that is located in Michigan, but will only agree to pay for the timber after it has been delivered. In this case, which party would pay for freight costs? <u>B) THE FREIGHT COSTS WILL BE PAID BY THE SELLER</u>
Refer to the following table:
What is the gross profit? <u>A) $125,000</u>
The following data are for the RoadRunner Corporation, which uses a perpetual inventory system:
What is the gross profit? <u>$189,000</u>
The Cambridge Market purchases a large variety of fans on May 1st in preparation for the hot summer weather. The market sells all their inventory of fans by September 15th. What is the operating cycle of fan inventory? <u>D) MAY 1st - SEPTEMBER 15th</u>
