Chapter 05 – Accounting for Retail Businesses
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Page 61
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.08 – Closing Entries
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
148. If the physical count of inventory revealed $158,000 of inventory on hand and the inventory records reported
$163,000, what would be the necessary adjusting entry to record inventory shrinkage?
a.
debit Inventory, $158,000; credit Cost of Goods Sold, $158,000
b.
debit Inventory, $5,000; credit Cost of Goods Sold, $5,000
c.
debit Cost of Goods Sold, $163,000; credit Inventory, $158,000
d.
debit Cost of Goods Sold, $5,000; credit Inventory, $5,000
ANSWER:
d
RATIONALE:
Inventory shrinkage = Account balance of Inventory – Physical inventory on hand =
$163,000 – $158,000 = $5,000
Adjusting entry to record inventory shrinkage: debit Cost of Goods Sold, $5,000;
credit Inventory, $5,000
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.07 – Adjusting Entries
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
ACCT.AICPA.FN.04 – Reporting
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
149. Inventory shrinkage is recorded when
a.
merchandise is returned by a buyer
b.
merchandise purchased from a seller is incomplete or short
c.
merchandise is returned to a seller
d.
there is a difference between a physical count of inventory and inventory records
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
