《会计专业英语》习题答案人大版chapter 3.docxVIP

Answer to questions in Chapter 3 Multiple Choice Questions D 2. B 3.C 4.C 5.D 6.B 7.B 8.B 9. B 10.B Discussion Questions 1. What is the difference between periodic and perpetual inventory systems? Answer: There are two alternative approaches that can be used in accounting for inventories. When adopting the perpetual inventory system, costs of goods purchased and sold are both recorded in the subsidiary ledgers. The business adds the costs of goods purchased to the beginning inventory to get the value of goods available for sale. Then, by deducting the costs of goods sold, the ending inventory is determined. At least a yearly physical count is taken at the end of the period to confirm how many items are held in ending inventory. If there is any difference between the book record and the physical count, the book record should be adjusted to the physical inventory and the difference will be examined by an officer in charge. Variances caused by errors is corrected; shrinkage is usually included in costs of goods on hand, and breakage, theft, or waste is debited to Other Income and Loss or Other Receivables from insurance company. In a perpetual inventory system, the underlying relationship among ending inventory, goods available for sale, and cost of goods sold is expressed as: Ending inventory = Goods available for sale - Cost of goods sold In the periodic inventory system, inventory accounts are not updated with purchases or sales and show only the beginning balances. All purchases are debited to Purchases account, and no effort is made to record sales at all. As a result, the company has to take a complete count of its entire inventory periodically so that the ending balance can be known. The cost of goods sold is then computed by subtracting the cost of ending inventory from the cost of goods available for sale, as expressed in the following equation. Cost of goods sold = Good available for sale - Ending inventory =Beginning Inventory + Purchases - Ending Inventory