Question 1

Which of the following would most likely use a perpetual inventory system?

Accepted Answer

A) hardware store 
B) shoe store 
C) car dealership 
D) bookstore 
A) hardware store 
B) shoe store 
C) car dealership 
D) bookstore

Question 2

Just-in-time inventory systems are designed to reduce the cost of inventory storage and increase the amount of cash on hand.

Accepted Answer

A) True 
 B)False

Question 3

The cost of goods available for sale includes

Accepted Answer

A) just beginning inventory. 
B) beginning inventory less ending inventory. 
C) beginning inventory plus purchases less ending inventory. 
D) beginning inventory plus purchases. 
A) just beginning inventory. 
B) beginning inventory less ending inventory. 
C) beginning inventory plus purchases less ending inventory. 
D) beginning inventory plus purchases.

Question 4

Gross margin is the difference between sales revenue and costs of goods available for sale.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would be most likely to use the specific identification method?

Accepted Answer

A) shoe store 
B) car dealership 
C) grocery store 
D) bookstore 
A) shoe store 
B) car dealership 
C) grocery store 
D) bookstore

Question 6

Use the following information for questions below
A company had the following inventory activity during April:
$$\begin{array}{l}
\text { }\
\begin{array} { l l l l l} 
&&\text {units }&\text { unit cost}&\text { total cost}\
\text { beginning}&\text {inventory }&800&\$10.00&\$8,000\
\text { purchase}&\text {april 6 }&1,400&11.00&15,400\
\text {sale }&\text {april  }&(1,500)\
\text {purchase }&\text {april  17}&900&10.50&9,450\
\text {sale  }&\text {april  24 }&(900)\
\end{array}
\end{array}$$
-If the company is using a perpetual system and the weighted-average cost formula,what is the ending inventory closest to?

Accepted Answer

A) $8,470 
B) $7,777 
C) $7,560 
D) $7,391 
A) $8,470 
B) $7,777 
C) $7,560 
D) $7,391

Question 7

Foamy Suds Ltd.had a fire at its warehouse and was trying to determine the cost of the inventory lost.For the year to date,sales had been $525,000,opening inventory was $125,000,purchases to date were $318,000,and the cost-to-sales ratio is normally 60%.Inventory not damaged in the fire was $18,000.What was the cost of the inventory damaged in the fire?

Accepted Answer

A) $110,000 
B) $124,000 
C) $160,000 
D) $74,000 
A) $110,000 
B) $124,000 
C) $160,000 
D) $74,000

Question 8

When using the LCM rule in Canada,the market value is most commonly

Accepted Answer

A) net present value. 
B) selling price less profit margin. 
C) replacement cost. 
D) net realizable value. 
A) net present value. 
B) selling price less profit margin. 
C) replacement cost. 
D) net realizable value.

Question 9

The LCM rule is usually applied to groups of similar items.

Accepted Answer

A) True 
 B)False

Which of the following would most likely use a perpetual inventory system?

Just-in-time inventory systems are designed to reduce the cost of inventory storage and increase the amount of cash on hand.

The cost of goods available for sale includes

Gross margin is the difference between sales revenue and costs of goods available for sale.

Which of the following would be most likely to use the specific identification method?

When using the LCM rule in Canada,the market value is most commonly

The LCM rule is usually applied to groups of similar items.

Overview of Corporate Financial Reporting

Analyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

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Exam 7: Inventory

Which of the following would most likely use a perpetual inventory system?

Just-in-time inventory systems are designed to reduce the cost of inventory storage and increase the amount of cash on hand.

The cost of goods available for sale includes

Gross margin is the difference between sales revenue and costs of goods available for sale.

Which of the following would be most likely to use the specific identification method?

When using the LCM rule in Canada,the market value is most commonly

The LCM rule is usually applied to groups of similar items.

Overview of Corporate Financial Reporting

Analyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

Filters