Under the Perpetual Inventory System,the Entry to Recognize Inventory Losses

question 62

Multiple Choice

Under the perpetual inventory system,the entry to recognize inventory losses usually contains a

• A)debit to Cost of Goods Sold.
• B)debit to Merchandise Inventory.
• C)credit to Gross Margin.
• D)credit to Cash.

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Definitions:

Accounts Payable

Liabilities representing amounts owed to creditors for goods and services the company has received but not yet paid for.

Raw Materials Purchases

is the total cost of raw materials bought for production during a given period.

Direct Materials Purchase Budget

A financial plan that estimates the cost and quantity of raw materials required for production in a specific period.

Ending Inventories

The value of goods available for sale or use at the end of an accounting period.