Question 1

Damaged goods are not counted in inventory if they cannot be sold.

Accepted Answer

A) True 
 B)False  True

Question 2

The retail amount of inventory refers to its dollar amount measured using selling prices of inventory items.

Accepted Answer

A) True 
 B)False  True

Question 3

There is no difference in the amount of inventory calculated by the periodic and perpetual inventory systems when using FIFO or weighted average cost flow assumptions.

Accepted Answer

A) True 
 B)False  False

Question 4

Understatement of ending inventory causes

Accepted Answer

A)  Cost of goods sold to be overstated and net income to be understated 
B)  Cost of goods sold to be overstated and net income to be overstated 
C)  Cost of goods sold to be understated and net income to be understated 
D)  Cost of goods sold to be understated and net income to be overstated 
E)  Cost of goods sold to be overstated and net income to be accurate 
A)  Cost of goods sold to be overstated and net income to be understated 
B)  Cost of goods sold to be overstated and net income to be overstated 
C)  Cost of goods sold to be understated and net income to be understated 
D)  Cost of goods sold to be understated and net income to be overstated 
E)  Cost of goods sold to be overstated and net income to be accurate

Question 5

During the current year, Carter Company reported $500,000 in sales, and purchased merchandise that cost $300,000. The company's beginning inventory and ending inventory was $60,000. Calculate the gross profit ratio.

Accepted Answer

$500,000 - $300,000

Question 6

Provide calculations to find how many days it will take to convert inventory on hand into cash.

Accepted Answer

$6,080/521

Question 7

Physical counts of inventory

Accepted Answer

A)  Are not necessary under the perpetual system 
B)  Are necessary to adjust for shrinkage 
C)  Should be taken at least once a month 
D)  Are necessary to adjust for shrinkage and should be taken at least once a month 
E)  Are not necessary under the perpetual system and should be taken at least once a month 
A)  Are not necessary under the perpetual system 
B)  Are necessary to adjust for shrinkage 
C)  Should be taken at least once a month 
D)  Are necessary to adjust for shrinkage and should be taken at least once a month 
E)  Are not necessary under the perpetual system and should be taken at least once a month

Question 8

Majik Carpet was having problem selling inventory item #371 so the owner decided to place that item with a consignee to see if they could sell it. The consignee still had the carpet at June 30, 2020 and it was mistakenly not included in the ending inventory count. Indicate the amount of any over or understatement of net income for the month of June as a result of this error

Accepted Answer

Since ending inventory for item #371 is

Question 9

Calculate the cost of goods sold for June and the ending inventory balance at June 30, 2020.

Accepted Answer

The answer of Calculate the cost of goods sold for...

Question 10

An inventory error carried forward into the next period causes misstatements in

Accepted Answer

A)  Cost of goods sold 
B)  Gross profit 
C)  Net income 
D)  Gross profit and net income 
E)  All of the above 
A)  Cost of goods sold 
B)  Gross profit 
C)  Net income 
D)  Gross profit and net income 
E)  All of the above

Question 11

Isaiah's Gear had the following ending inventory costs:
 $$\begin{array} { | l | r | r | } 
\hline \text { Units an Hand } & \text { Unit Cost } & \text { Unit NRV } \
\hline 20 & \$ 50 & { \$ 6 0 } \
\hline 10 & \$ 40 & \$ 45 \
\hline 30 & \$ 30 & \$ 25 \
\hline 40 & \$ 20 & \$ 15 \
\hline
\end{array}$$ Calculate the lower of cost and net realizable value (LCNRV) on an item by item basis.

Accepted Answer

The answer of Isaiah's Gear had the following ending inventory...

Question 12

Describe the accounting aspects of a periodic inventory system.

Accepted Answer

Each purchase of merchandise is debited

Question 13

Goods on consignment

Accepted Answer

A)  Are goods shipped by the owner to the consignee who sells the goods for the owner 
B)  Are reported in the consignee's books as inventory 
C)  Are reported on the consignor's books as inventory 
D)  Are goods shipped by the owner to the consignee who sells the goods for the owner and are reported in the consignee's books as inventory 
E)  Are goods shipped by the owner to the consignee who sells the goods for the owner and are reported on the consignor's books as inventory 
A)  Are goods shipped by the owner to the consignee who sells the goods for the owner 
B)  Are reported in the consignee's books as inventory 
C)  Are reported on the consignor's books as inventory 
D)  Are goods shipped by the owner to the consignee who sells the goods for the owner and are reported in the consignee's books as inventory 
E)  Are goods shipped by the owner to the consignee who sells the goods for the owner and are reported on the consignor's books as inventory

Question 14

Trekking Company reported the following data:
   Instructions: (1) Calculate Trekking Company's merchandise turnover for each year to two decimal places. (2) Comment on the company's efficiency in managing its inventory.

Accepted Answer

@#IMG-DLM& The company's inven

Question 15

Because an inventory error causes an offsetting error in the next period, it is sometimes said to be self-correcting.

Accepted Answer

A) True 
 B)False

Question 16

Damaged or obsolete goods

Accepted Answer

A)  Are not counted as saleable inventory 
B)  Are counted at full cost 
C)  Are included in inventory at net realizable value if that is less than cost 
D)  Are not counted as saleable inventory or are counted at full cost 
E)  Are not counted as saleable inventory and are included in inventory at net realizable value if that is less than cost 
A)  Are not counted as saleable inventory 
B)  Are counted at full cost 
C)  Are included in inventory at net realizable value if that is less than cost 
D)  Are not counted as saleable inventory or are counted at full cost 
E)  Are not counted as saleable inventory and are included in inventory at net realizable value if that is less than cost

Question 17

Acceptable inventory cost flow assumptions in Canada include

Accepted Answer

A)  FIF 
B)  Specific identification. 
C)  Weighted-average method 
D)  FIFO and specific identification 
E)  All of the above 
A)  FIF 
B)  Specific identification. 
C)  Weighted-average method 
D)  FIFO and specific identification 
E)  All of the above

Question 18

During January, a company that uses a perpetual inventory system had beginning inventory, purchases, and sales as follows:
 $$\begin{array} { | r | r | r | r | } 
\hline & & \text { Units } & \text { Cost per unit } \
\hline & \text { Begin Invenitory } & 100 & 12 \
\hline \text { Jan } 5 & \text { Sale } & 50 & \
\hline 10 & \text { Purchase } & 70 & 16 \
\hline 15 & \text { Sale } & 25 & \
\hline 25 & \text { Sale } & 35 & \
\hline
\end{array}$$ Prepare a schedule to show the cost of goods sold and ending inventory using the moving weighted average method of costing rounding calculations to two decimals.

Accepted Answer

The answer of During January, a company that uses a...

Question 19

Merchandise inventory includes

Accepted Answer

A)  All goods owned by a company and held for sale 
B)  Goods in transit 
C)  Goods on consignment 
D)  Damaged goods 
E)  All of the above 
A)  All goods owned by a company and held for sale 
B)  Goods in transit 
C)  Goods on consignment 
D)  Damaged goods 
E)  All of the above

Question 20

In the process of adjusting inventory, how can the lower of cost and net realizable value be applied to the ending inventory?

Accepted Answer

A)  The inventory as a whole 
B)  Current replacement cost 
C)  Current sales price 
D)  To groups of similar or related items 
E)  Purchase price 
A)  The inventory as a whole 
B)  Current replacement cost 
C)  Current sales price 
D)  To groups of similar or related items 
E)  Purchase price

Damaged goods are not counted in inventory if they cannot be sold.

The retail amount of inventory refers to its dollar amount measured using selling prices of inventory items.

There is no difference in the amount of inventory calculated by the periodic and perpetual inventory systems when using FIFO or weighted average cost flow assumptions.

Understatement of ending inventory causes

During the current year, Carter Company reported $500,000 in sales, and purchased merchandise that cost $300,000. The company's beginning inventory and ending inventory was $60,000. Calculate the gross profit ratio.

Provide calculations to find how many days it will take to convert inventory on hand into cash.

Physical counts of inventory

Calculate the cost of goods sold for June and the ending inventory balance at June 30, 2020.

An inventory error carried forward into the next period causes misstatements in

Isaiah's Gear had the following ending inventory costs: Units an Hand Unit Cost Unit NRV 20 \ 50 \ 60 10 \ 40 \ 45 30 \ 30 \ 25 40 \ 20 \ 15 Calculate the lower of cost and net realizable value (LCNRV) on an item by item basis.

Describe the accounting aspects of a periodic inventory system.

Goods on consignment

Trekking Company reported the following data: Instructions: (1) Calculate Trekking Company's merchandise turnover for each year to two decimal places. (2) Comment on the company's efficiency in managing its inventory.

Because an inventory error causes an offsetting error in the next period, it is sometimes said to be self-correcting.

Damaged or obsolete goods

Acceptable inventory cost flow assumptions in Canada include

Merchandise inventory includes

In the process of adjusting inventory, how can the lower of cost and net realizable value be applied to the ending inventory?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters

Exam 6: Inventory Costing and Valuation

Damaged goods are not counted in inventory if they cannot be sold.

The retail amount of inventory refers to its dollar amount measured using selling prices of inventory items.

There is no difference in the amount of inventory calculated by the periodic and perpetual inventory systems when using FIFO or weighted average cost flow assumptions.

Understatement of ending inventory causes

During the current year, Carter Company reported $500,000 in sales, and purchased merchandise that cost $300,000. The company's beginning inventory and ending inventory was $60,000. Calculate the gross profit ratio.

Provide calculations to find how many days it will take to convert inventory on hand into cash.

Physical counts of inventory

Calculate the cost of goods sold for June and the ending inventory balance at June 30, 2020.

An inventory error carried forward into the next period causes misstatements in

Isaiah's Gear had the following ending inventory costs: Units an Hand Unit Cost Unit NRV 20 \ 50 \ 60 10 \ 40 \ 45 30 \ 30 \ 25 40 \ 20 \ 15 Calculate the lower of cost and net realizable value (LCNRV) on an item by item basis.

Describe the accounting aspects of a periodic inventory system.

Goods on consignment

Trekking Company reported the following data: Instructions: (1) Calculate Trekking Company's merchandise turnover for each year to two decimal places. (2) Comment on the company's efficiency in managing its inventory.

Because an inventory error causes an offsetting error in the next period, it is sometimes said to be self-correcting.

Damaged or obsolete goods

Acceptable inventory cost flow assumptions in Canada include

Merchandise inventory includes

In the process of adjusting inventory, how can the lower of cost and net realizable value be applied to the ending inventory?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters