Week 3: Assignment: Decision Case 1

Darlene Solano

ACC205: Principles of Accounting 1

Instructor Robert Carr

October 7, 2010

Week 3: Assignment: Decision Case 1

Chapter 6, page 344, Decision Case 1:

Assume you are opening a Bed Bath & Beyond store. To Finance the business, you need a 500,000 loan, and your banker requires a set of forecasted financial statements. Assume you are preparing the statements and must make some decisions about how to do the accounting for the business. Answer the following questions (refer back to Chapter 5 if necessary).

1: Which type of inventory system will you use? Give your reason. (p. 255).

There are two main inventory systems, perpetual and periodic. I would use the perpetual inventory system if I were starting a new business. My reason...