BUS ADM 201 UWM EXAM 2
QUESTIONS AND ANSWERS
, 1. what is a perpetual invento- -checks accuracy
ry system? -determines amount lost due to waste, shoplifting
2. what is a periodic inventory -determines cogs and inventory at end of period
system?
3. attributes of specific identi- -identifies all costs associated with a specific unit of inventory
fication inventory system -works best for inventory specific to customer specifications
4. attributes of FIFO inventory -first item you purchased will be the first unit you sell
system -cost of most recent goods purchased are used to determine end-
ing inventory
5. attributes of LIFO inventory -last item you purchased will be the first unit you sell
system -cost of oldest inventory purchase are used to determine inventory
ending
6. attributes of average cost -allocated cost of goods available for sale on the basis of weight-
inventory system ed-average cost incurred
7. inventory turnover ratio cogs/average inventory
8. days in inventory 365/inventory turnover ratio
9. cash equivalents -short term, highly liquid investments that are readily convertible to
cash
10. restricted cash -cash is not available for general use but rather is restricted for a
special purpose
11. what are internal controls -methods and measures adopted to safeguard assets, enhance re-
liability of accounting records, ensure compliance with regulations
12. what is a debit memo
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QUESTIONS AND ANSWERS
, 1. what is a perpetual invento- -checks accuracy
ry system? -determines amount lost due to waste, shoplifting
2. what is a periodic inventory -determines cogs and inventory at end of period
system?
3. attributes of specific identi- -identifies all costs associated with a specific unit of inventory
fication inventory system -works best for inventory specific to customer specifications
4. attributes of FIFO inventory -first item you purchased will be the first unit you sell
system -cost of most recent goods purchased are used to determine end-
ing inventory
5. attributes of LIFO inventory -last item you purchased will be the first unit you sell
system -cost of oldest inventory purchase are used to determine inventory
ending
6. attributes of average cost -allocated cost of goods available for sale on the basis of weight-
inventory system ed-average cost incurred
7. inventory turnover ratio cogs/average inventory
8. days in inventory 365/inventory turnover ratio
9. cash equivalents -short term, highly liquid investments that are readily convertible to
cash
10. restricted cash -cash is not available for general use but rather is restricted for a
special purpose
11. what are internal controls -methods and measures adopted to safeguard assets, enhance re-
liability of accounting records, ensure compliance with regulations
12. what is a debit memo
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