ACC/290 Principles of Accounting I
(8 questions 100 word answers)
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Additional accounting procedures for a merchandising company. How would you describe the difference between the operating cycles of a Service Company and that of a Merchandising Company? What accounts would a merchandising company have in its chart of accounts that would be different from a service-based company?
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What is the difference between a perpetual inventory system and a periodic inventory system? Pick one and discuss the advantages and disadvantages.
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One unique aspect of merchandising financial statements is the Cost of Goods Sold account. How would you calculate cost of goods sold at the end of an accounting period under a periodic inventory system? What items make up cost of goods sold?
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What is the difference between a single step income statement and a multiple step income statement? What are the advantages and disadvantages of each? If you were a business owner, which type would you prefer to use?
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Describe non-operating activities.
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Describe comprehensive income and comprehensive income statement.
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(a) Explain the income measurement process in a merchandising company. (b) How does income measurement differ between a merchandising company and a service company?
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What merchandising account(s) will appear in the post‐closing trial balance?