Accounting - Chapter 7

Which statement are true? (Select all that apply.)

The inventory methods apply to both perpetual and periodic inventory systems. Specific identification, weighted average cost, LIFO and FIFO are generally accepted costing methods. The inventory costing methods determine the amount of the debit to Cost of Goods Sold and credit to inventory.

On May 1, beginning inventory consists of 10 items at a cost of $10 each. On May 3, 10 items are purchased at $12 each. On May 8, 12 items are sold. On May 15, 10 items are purchased at $14 each. Using perpetual FIFO, the Cost of Goods Sold for the month ended May 31 equals _____.

$132

Which inventory costing method assumes that the inventory's cost flow out in the same order the goods are received?

FIFO

Gross Profit is ___. (Check all that apply.)

a subtotal on the income statement equal to Net Sales minus the Cost of Goods Sold

Specific identification is ___.

an inventory method that tracks which item is actually sold and debits Cost of Goods Sold for the actual cost of the item