Question

Question 4: complete the following statements: No. statement complete 1 expenses incurred in the process of earning sales revenue (Examples: sales salaries and insurance expense) 2 ..... profit equal Sales Revenue less Cost of Goods Sold 3 .......... Inventory: Detailed records of the cost of each item are maintained, and the cost of each item sold is determined from records when the sale occurs. 4 ......... Inventory: Cost of goods sold is determined only at the end of an accounting period. 5 Net realizable value: Amount that a company expects to realize (receive from the sale of inventory) 6 ...... A PHYSICAL INVENTORY Involves counting, weighing, or measuring each kind of inventory on hand 7 Companies often“....... inventory” when the business is closed or business is slow or at the end of the accounting period 8 ......... GOODS: To hold the goods of other parties and try to sell the goods for them for a fee, but without taking ownership of the goods 9 Most of IFRS companies use ........ cost flow assumption method 10 A major advantage of the ....... method is that in a period of inflation, the costs allocated to ending inventory will approximate their current cost 11 Both inventory and net income are ....... when companies use FIFO in a period of inflation 12 Average-cost results in the ....... income taxes (because of lower net income) during times of rising prices 13 If ending inventory........; cost of goods sold understated, but net income, assets and equity overstated 14 If ending inventory........; cost of goods sold overstated, but net income, assets and equity understated

Answer 1

1. operating expenses

2. Gross

3. Perpetual Inventory system

4. Periodic inventory system

5. Net realizable value

6. Taking

7. take

8. consigned

9. same

10. FIFO

11. higher

12. lower

13. understated

14. overstated