Accounting for Inventory Purchases

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which accounting term refers to buying items that are meant to be resold to customers?

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1. What is the accounting equation for calculating the cost of purchasing inventory?

2. Which of the following accounting terms is a discount given by a merchant to a supplier for paying invoices on time?

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About This Quiz & Worksheet

This quiz and corresponding worksheet gauge your understanding of how to record inventory purchases for accounting purposes. You will be quizzed on terms and definitions relating to these practices.

Quiz and Worksheet Goals

In these assessments, you'll be tested on:

  • The term used for buying merchandise to be resold to customers
  • How to calculate the cost of purchasing inventory
  • The name of the discount given to merchants who pay their invoice on time
  • The type of cost incurred for moving merchandise from one location to another
  • The account name under which items purchased for resale are recorded

Skills Practiced

This worksheet and quiz will allow you to test the following skills:

  • Reading comprehension- ensure that you draw the most important information from the related lesson about how businesses need to record inventory purchases
  • Defining key concepts - ensure that you can accurately define main phrases, such as inventory purchases and ownership and transfer fees
  • Distinguishing differences - compare and contrast topics from the lesson, such as trade and purchase discounts
  • Knowledge application - use your knowledge to answer questions about how to calculate the cost of inventory purchases

Additional Learning

To learn more about this topic, review the accompanying lesson called Accounting for Inventory Purchases. This lesson covers the following objectives:

  • Define inventory purchases
  • Present the equation used to calculate inventory purchasing costs
  • Provide detailed examples of each part of this equation
  • Explain the accounting process of recording inventory purchases
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