Lesson 5: Accounting For Inventory

The correct answer is Trial Balance and Work Sheets. In bookkeeping, the trial balance and work sheets are the second to the last step in the flow of recording transactions. After the transactions are recorded in the special journals and posted to the general ledger, the trial balance and work sheets are prepared. The trial balance is a list of all the accounts and their balances to ensure that debits equal credits. The work sheets are used to summarize the data from the general ledger and prepare the financial statements.

The correct answer is Financial Statements. The last step in a flow of Bookkeeping Record is to prepare the business's financial reports, which are known as financial statements. These statements provide a summary of the company's financial performance and position, including the income statement, balance sheet, and cash flow statement. They are crucial for decision-making and assessing the overall financial health of the business.

Under the periodic inventory method, the entry made for purchasing a product is to debit the Purchases Account. This account is used to record the cost of goods purchased during a specific period.

Under the perpetual inventory method, the entry made for purchasing a product is to debit the Inventory Control Account. This account is used to track the quantity and value of inventory on hand at any given time. By debiting this account, the company increases the value of inventory on the balance sheet.

The repeated entry of "Debit Inventory Control Account" for the perpetual method may be a mistake, as it contradicts the correct answer.

Special Journals are used to record specific types of transactions, such as cash receipts, cash disbursements, sales, purchases, payroll, and general journal entries. These journals provide a chronological listing of all business transactions and include detailed information about each transaction. The use of special journals helps to organize and streamline the recording process, making it easier to track and analyze transactions.

Under the periodic inventory system, there is no entry made to record the sale of a product. Instead, the inventory account is debited to reflect the decrease in inventory. On the other hand, under the perpetual inventory system, the cost of goods sold is debited to record the expense and the decrease in inventory, and no adjusting entries are needed to record the cost of goods sold and adjust the ending inventory. Therefore, the correct answer is that under the periodic method, the entry made for the transaction is to debit the inventory account.