Question 1

Costs included in the Merchandise Inventory account can include all of the following except:

Accepted Answer

A) Invoice price minus any discount. 
B) Transportation-in. 
C) Storage. 
D) Insurance. 
E) Damaged inventory that cannot be sold. 
A) Invoice price minus any discount. 
B) Transportation-in. 
C) Storage. 
D) Insurance. 
E) Damaged inventory that cannot be sold.

Question 2

Ulrich had cost of goods sold of $6.7 million,ending inventory of $2.2 million,and average inventory of $1.9 million.Its days' sales in inventory equals:

Accepted Answer

A) 120. 
B) 104. 
C) 60. 
D) 35. 
E) 180. 
A) 120. 
B) 104. 
C) 60. 
D) 35. 
E) 180.

Question 3

A company normally sells its product for $20 per unit.However,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has now fallen to $13 per unit.What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?

Accepted Answer

A) $1,000. 
B) $1,400. 
C) $400. 
D) $600. 
E) $800. 
A) $1,000. 
B) $1,400. 
C) $400. 
D) $600. 
E) $800.

Question 4

Consignment goods are:

Accepted Answer

A) Goods shipped by the owner to the consignee who sells the goods for the owner. 
B) Reported in the consignee's books as inventory. 
C) Goods shipped to the consignor who sells the goods for the owner. 
D) Not reported in the consignor's inventory since they do not have possession of the inventory. 
E) Always paid for by the consignee when they take possession. 
A) Goods shipped by the owner to the consignee who sells the goods for the owner. 
B) Reported in the consignee's books as inventory. 
C) Goods shipped to the consignor who sells the goods for the owner. 
D) Not reported in the consignor's inventory since they do not have possession of the inventory. 
E) Always paid for by the consignee when they take possession.

Question 5

Salmone Company reported the following purchases and sales of its only product.Salmone uses a perpetual inventory system.Determine the cost assigned to the ending inventory using FIFO.

Accepted Answer

A) $2,260 
B) $3,180 
C) $1,860 
D) $3,580 
E) $2,100 
A) $2,260 
B) $3,180 
C) $1,860 
D) $3,580 
E) $2,100

Question 6

A company made the following merchandise purchases and sales during the month of May:   There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

Accepted Answer

The answer of A company made the following merchandise purchases...

Question 7

Bedrock Company reported a December 31 ending inventory balance of $412,000.The following additional information is also available: ▪ The ending inventory balance of $412,000 included $72,000 of consigned inventory for which Bedrock was the consignor.
▪ The ending inventory balance of $412,000 included $22,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.
Based on this information,the correct balance for ending inventory on December 31 is:

Accepted Answer

A) $412,000 
B) $340,000 
C) $318,000 
D) $362,000 
E) $390,000 
A) $412,000 
B) $340,000 
C) $318,000 
D) $362,000 
E) $390,000

Question 8

A company's normal selling price for its product is $20 per unit.However,due to market competition,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has fallen to $13 per unit.Calculate the value of this company's inventory at the lower of cost or market.

Accepted Answer

A) $2,550. 
B) $2,600. 
C) $2,700. 
D) $3,000. 
E) $3,200. 
A) $2,550. 
B) $2,600. 
C) $2,700. 
D) $3,000. 
E) $3,200.

Question 9

If a period-end inventory amount is reported in error,it can cause a misstatement in all of the following except:

Accepted Answer

A) Cost of goods sold. 
B) Gross profit. 
C) Net sales. 
D) Current assets. 
E) Net income. 
A) Cost of goods sold. 
B) Gross profit. 
C) Net sales. 
D) Current assets. 
E) Net income.

Question 10

The cost of an inventory item includes the _____________,plus ______________ costs necessary to put it in a place and condition for sale.
answers must appear in this order

Accepted Answer

invoice price minus

Question 11

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 11 units that were sold?

Accepted Answer

A) $2,239. 
B) $2,255. 
C) $2,200. 
D) $2,228. 
E) $2,215. 
A) $2,239. 
B) $2,255. 
C) $2,200. 
D) $2,228. 
E) $2,215.

Question 12

The ______________________ method of assigning costs to inventory and cost of goods sold assumes that the most recent purchases are sold first.

Accepted Answer

last in,fi

Question 13

Buffalo Company reported a December 31 ending inventory balance of $412,000.The following additional information is also available: ▪ The ending inventory balance of $412,000 did not include goods costing $48,000 that were purchased by Buffalo on December 28 and shipped FOB destination on that date.Buffalo did not receive the goods until January 2 of the following year.
▪ The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000.The net realizable value of the damaged goods was $10,000.
Based on this information,the correct balance for ending inventory on December 31 is:

Accepted Answer

A) $374,000 
B) $384,000 
C) $460,000 
D) $422,000 
E) $438,000 
A) $374,000 
B) $384,000 
C) $460,000 
D) $422,000 
E) $438,000

Question 14

An overstated beginning inventory will ______________ cost of goods sold and _____________ net income.
answers must appear in this order

Accepted Answer

overstate

Question 15

A company had beginning inventory of 10 units at a cost of $20 each on March 1.On March 2,it purchased 10 units at $22 each.On March 6 it purchased 6 units at $25 each.On March 8,it sold 22 units for $54 each.Using the FIFO perpetual inventory method,what was the cost of the 22 units sold?

Accepted Answer

A) $470 
B) $490 
C) $450 
D) $570 
E) $520 
A) $470 
B) $490 
C) $450 
D) $570 
E) $520

Question 16

Since an error in the period-end inventory causes an offsetting error in the next period:

Accepted Answer

A) Managers can ignore the error. 
B) It is said to be self-correcting. 
C) It affects only income statement accounts. 
D) If affects only balance sheet accounts. 
E) Is immaterial for managerial decision making. 
A) Managers can ignore the error. 
B) It is said to be self-correcting. 
C) It affects only income statement accounts. 
D) If affects only balance sheet accounts. 
E) Is immaterial for managerial decision making.

Question 17

Jammer Company uses a weighted average perpetual inventory system and reports the following:   What is the per-unit value of ending inventory on August 31?

Accepted Answer

A) $12.00 
B) $13.80 
C) $15.42 
D) $16.00 
E) $17.74 
A) $12.00 
B) $13.80 
C) $15.42 
D) $16.00 
E) $17.74

Question 18

Decisions management must make in accounting for inventory cost include all of the following except:

Accepted Answer

A) Costing method. 
B) Perpetual or periodic inventory system. 
C) Customer demand for inventory. 
D) Use of market values or other estimates. 
E) Items included in inventory and their costs. 
A) Costing method. 
B) Perpetual or periodic inventory system. 
C) Customer demand for inventory. 
D) Use of market values or other estimates. 
E) Items included in inventory and their costs.

Question 19

Damaged and obsolete goods that can be sold:

Accepted Answer

A) Are never counted as inventory. 
B) Are included in inventory at their full cost. 
C) Are included in inventory at their net realizable value. 
D) Should be disposed of immediately. 
E) Are assigned a value of zero. 
A) Are never counted as inventory. 
B) Are included in inventory at their full cost. 
C) Are included in inventory at their net realizable value. 
D) Should be disposed of immediately. 
E) Are assigned a value of zero.

Question 20

An understatement of ending inventory will cause

Accepted Answer

A) An overstatement of assets and equity on the balance sheet. 
B) An understatement of assets and equity on the balance sheet. 
C) An overstatement of assets and an understatement of equity on the balance sheet. 
D) An understatement of assets and an overstatement of equity on the balance sheet. 
E) No effect on the balance sheet. 
A) An overstatement of assets and equity on the balance sheet. 
B) An understatement of assets and equity on the balance sheet. 
C) An overstatement of assets and an understatement of equity on the balance sheet. 
D) An understatement of assets and an overstatement of equity on the balance sheet. 
E) No effect on the balance sheet.

Exam 6: Inventories and Cost of Sales

Costs included in the Merchandise Inventory account can include all of the following except:

Ulrich had cost of goods sold of $6.7 million,ending inventory of $2.2 million,and average inventory of $1.9 million.Its days' sales in inventory equals:

Consignment goods are:

Salmone Company reported the following purchases and sales of its only product.Salmone uses a perpetual inventory system.Determine the cost assigned to the ending inventory using FIFO.

A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

If a period-end inventory amount is reported in error,it can cause a misstatement in all of the following except:

The cost of an inventory item includes the _____________,plus ______________ costs necessary to put it in a place and condition for sale. answers must appear in this order

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 11 units that were sold?

The ______________________ method of assigning costs to inventory and cost of goods sold assumes that the most recent purchases are sold first.

An overstated beginning inventory will ______________ cost of goods sold and _____________ net income. answers must appear in this order

A company had beginning inventory of 10 units at a cost of $20 each on March 1.On March 2,it purchased 10 units at $22 each.On March 6 it purchased 6 units at $25 each.On March 8,it sold 22 units for $54 each.Using the FIFO perpetual inventory method,what was the cost of the 22 units sold?

Since an error in the period-end inventory causes an offsetting error in the next period:

Jammer Company uses a weighted average perpetual inventory system and reports the following: What is the per-unit value of ending inventory on August 31?

Decisions management must make in accounting for inventory cost include all of the following except:

Damaged and obsolete goods that can be sold:

An understatement of ending inventory will cause

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

Filters

The cost of an inventory item includes the _,plus __ costs necessary to put it in a place and condition for sale. answers must appear in this order

An overstated beginning inventory will __ cost of goods sold and _ net income. answers must appear in this order