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Accounting SI Test 3 Review
Terms in this set (12)
What is the goal of the Lower of Cost (LCM) Rule?
to apply the conservatism principle
Under the periodic inventory system when a company makes a sale when must they update inventory?
only at the end of the period
what will be the effect in the next period if the ending inventory is stated at $500 but is actually $300?
cost of goods is overstated
In a period of falling prices which inventory system will provide the highest Net Income?
If goods are shipped FOB destination who owns the goods while they are in the shipping process
How often do you calculate a new weighted average under the perpetual inventory method?
each time you make a sale
If the ending inventory is understated the cost of goods sold is ___
if the ending inventory is ___ the net income is overstated
if the ending inventory is over stated then total assets are
if the ending inventory is overstated the cost of goods sold is what in the next period
if the ending inventory is ___ in the current period then net income is overstated in the next period
if the ending inventory is overstated in the current period then ending inventory is what in the next period
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