Chapter 6

Question 1

WHY DOes physical inventory need to be counted at the end of accounting period (ALWAYS)?

Answer 1

1) to check accuracy of perpertual inventory records
2) to determine the amount of inventory lost or shrinkage or theft

Question 2

What does it mean to give goods on consignment?

from consignor to consignee

Question 3

How long does the consigner retain ownership of the goods

Answer 3

even if the consignee physically has the goods (the consignee is merely holding the goods until they are sold, they are still the legal property of the consginor)

Question 4

what does taking inventory mean?

Answer 4

the same as counting inventory

Question 5

3 types of cost formula

Answer 5

specific identification
FIFO
average cost