Accounting 2 Honors 2.01-2.02

FOB Shipping Point

The Bead Boutique offers handcrafted jewelry for sale. In the weeks prior to Mother's Day, many customers visited the store and purchased items to be delivered as gifts. If the shipments are paid for by the buyer, how will the shipments. be classified?

FOB Destination

The Bead Boutique offers handcrafted jewelry for sale. In the weeks prior to Mother's Day, the owner purchased beads, strings, and clasps from a company in Maine to make the store's inventory. If the company in Maine pays for the shipping charges, how will the shipment be classified?

Consignee

Carlee Jones has many gently used prom dresses. Dresses for You, a consignment shop, has agreed to sell Carlee's dresses on her behalf. The role of Dresses for You in this transaction is the:

Perpetual

Drive 'n Go Motors sells used cars. Inventory is continuously updated as vehicles are purchased and sold. What type of inventory control system does Drive 'n Go use?

FOB Destination

The Furniture Company makes beds out of oak wood. They are purchasing oak that has to be shipped from California. If the company selling the oak pays for the transportation charges, how will the shipment be classified?

Cost of Good Sold

A company uses a perpetual inventory system when inventory items are sold. After the company makes the journal entry that debits Cash and credits Sales, which account is debited in the second journal entry?

LIFO (last in, first out)

The Bead Boutique offers handcrafted jewelry for sale. Included in inventory are numerous beads, clasps, and necklace strings that were purchased throughout the year from different vendors. The owner assumes that the items left in ending inventory are the first ones purchased. What type of inventory control method does the Bead Boutique use?

Lower of Cost or Market

The Hometown Hardware store sells hardware supplies. After computing the ending inventory, the owners realized that their inventory valuation is significantly higher than the replacement cost. In order to reflect a more conservative valuation of ending inventory, which method will Hometown Hardware most likely use?

Specific Identification

Drive 'n Go Motors sells used cars. Inventory is continuously updated as vehicles are purchased and sold. Additionally, the cost of each car is separately accounted for when computing the ending inventory. What type of inventory control method does Drive 'n Go use?

Weighted Average

The Hometown Hardware store sells hardware supplies. Included in the inventory are boards, nails, screws, and tools. These items were purchased throughout the year at differing prices. The owner assigns a median cost to each item in inventory. What type of inventory control method does the Hometown Hardware use?

Periodic

The Bead Boutique offers handcrafted jewelry for sale. The owner counts inventory only once per year. What type of inventory control system does the Bead Boutique use?