Question 1

Goods in transit are included in a purchaser's inventory:

Accepted Answer

A) At any time during transit. 
B) If the goods are shipped FOB shipping point. 
C) When the supplier is responsible for freight charges. 
D) If the goods are shipped FOB destination. 
E) After the half-way point between the buyer and seller. 
A) At any time during transit. 
B) If the goods are shipped FOB shipping point. 
C) When the supplier is responsible for freight charges. 
D) If the goods are shipped FOB destination. 
E) After the half-way point between the buyer and seller.

Question 2

Which of the following inventory costing methods will always result in the same values for ending inventory and cost of goods sold regardless of whether a perpetual or periodic inventory system is used?

Accepted Answer

A) FIFO and LIFO 
B) LIFO and weighted-average cost 
C) Specific identification and FIFO 
D) FIFO and weighted-average cost 
E) LIFO and specific identification 
A) FIFO and LIFO 
B) LIFO and weighted-average cost 
C) Specific identification and FIFO 
D) FIFO and weighted-average cost 
E) LIFO and specific identification

Question 3

Monarch Company uses a weighted-average perpetual inventory system and has the following purchases and sales: $\begin{array}{|l|l|}
\hline \text { january } 1 & 20 \text { units were purchased at } \$ 10 \text { per unit. } \
\hline \text { January } 12 & 12 \text { units were sold. } \
\hline \text { january } 20 & 18 \text { units were purchased at } \$ 11 \text { per unit. } \
\hline
\end{array}$ What is the value of cost of goods sold?

Accepted Answer

A) $278. 
B) $272. 
C) $126. 
D) $398. 
E) $120. 
A) $278. 
B) $272. 
C) $126. 
D) $398. 
E) $120.

Question 4

Eastview Company uses a periodic LIFO inventory system,and has the following purchases and sales:   What is the value of ending inventory?

Accepted Answer

A) $2,730. 
B) $2,750. 
C) $2,670. 
D) $440. 
E) $360. 
A) $2,730. 
B) $2,750. 
C) $2,670. 
D) $440. 
E) $360.

Question 5

A company's total cost of inventory was $329,000 and its current replacement cost is $307,000.Under the lower cost or market,the amount reported should be $329,000.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Days' sales in inventory:

Accepted Answer

A) Is also called days' stock on hand. 
B) Focuses on average inventory rather than ending inventory. 
C) Is used to measure solvency. 
D) Is calculated by dividing cost of goods sold by ending inventory. 
E) Is a substitute for the acid-test ratio. 
A) Is also called days' stock on hand. 
B) Focuses on average inventory rather than ending inventory. 
C) Is used to measure solvency. 
D) Is calculated by dividing cost of goods sold by ending inventory. 
E) Is a substitute for the acid-test ratio.

Question 8

A company had the following purchases and sales during its first year of operations:   On December 31,there were 26 units remaining in ending inventory.Using the Perpetual FIFO inventory valuation method,what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

Accepted Answer

A) $3,405. 
B) $3,200. 
C) $3,365. 
D) $3,540. 
E) $3,270. 
A) $3,405. 
B) $3,200. 
C) $3,365. 
D) $3,540. 
E) $3,270.

Question 9

A company's inventory records indicate the following data for the month of January:
   If the company uses the last-in,first-out perpetual inventory system,what is the amount of cost of goods sold for January?

Accepted Answer

The answer of A company's inventory records indicate the following...

Question 10

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 11

A company must disclose any change in its inventory costing method in its financial statements.

Accepted Answer

A) True 
 B)False

Question 12

Goods on consignment are goods that are shipped by the owner,called the ________,to another party called the ________ that will sell the goods for the owner.

Accepted Answer

consignor; consignee

Question 13

Goods that are in transit and were shipped FOB shipping point should be included in the inventory records of the ________.

Accepted Answer

The answer of Goods that are in transit and were...

Question 14

If the seller is responsible for paying freight charges,then ownership of inventory passes when goods arrive at their destination.

Accepted Answer

A) True 
 B)False

Question 15

Beckenworth had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its days' sales in inventory equals: (Use 365 days a year.)

Accepted Answer

A) 0.21. 
B) 4.51. 
C) 4.79. 
D) 76.1 days. 
E) 80.9 days. 
A) 0.21. 
B) 4.51. 
C) 4.79. 
D) 76.1 days. 
E) 80.9 days.

Question 16

The overstatement of the ending inventory balance 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 correct. 
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 correct.

Question 17

A company uses the retail inventory method and has the following information available concerning its most recent accounting period:
 $$\begin{array} { | l | l | l | } 
\hline & \text { At Cost } & \text { At Retail } \
\hline \text { Tanuary } 1 \text { beginning inventory } & \$ 167,340 & \$ 304,240 \
\hline \text { Cost of goods purchased } & 561,850 & 1,021,560 \
\hline \text { Sales } & & 940,400 \
\hline \text { Sales returns } & & 40,200 \
\hline
\end{array}$$ 1.Use the retail inventory method to estimate the company's year-end inventory at cost.
2.A year-end physical count at retail prices yields a total inventory of $404,800.Prepare a calculation showing the company's loss from shrinkage at cost and at retail.

Accepted Answer

The answer of A company uses the retail inventory method...

Question 18

On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements.The following information is available: Beginning inventory,January 1: $4,000
Net sales: $80,000
Net purchases: $78,000
The company's gross margin ratio is 25%.Using the gross profit method,the cost of goods sold would be:

Accepted Answer

A) $60,000. 
B) $20,000. 
C) $58,500. 
D) $63,000. 
E) $19,500. 
A) $60,000. 
B) $20,000. 
C) $58,500. 
D) $63,000. 
E) $19,500.

Question 19

A company made the following merchandise purchases and sales during the month of May:
 $$\begin{array} { | l | l | l | l | } 
\hline \text { May 1 } & \text { Purchased } & 380 \text { units at } & \$ 15 \text { each } \
\hline \text { May 5 } & \text { Purchased } & 270 \text { units at } & \$ 17 \text { each } \
\hline \text { May 10 } & \text { Sold } & 400 \text { units at } & \$ 50 \text { each } \
\hline \text { May 20 } & \text { Purchased } & 300 \text { units at } & \$ 22 \text { each } \
\hline \text { May 25 } & \text { Sold } & 400 \text { units at } & \$ 50 \text { each } \
\hline
\end{array}$$ There was no beginning inventory.If the company uses the periodic weighted average method,what would be the cost of the ending inventory?

Accepted Answer

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

Question 20

IFRS reporting currently does not allow which method of inventory costing?

Accepted Answer

A) Specific identification. 
B) FIFO. 
C) LIFO. 
D) Weighted average. 
E) Lower of cost or market. 
A) Specific identification. 
B) FIFO. 
C) LIFO. 
D) Weighted average. 
E) Lower of cost or market.

Goods in transit are included in a purchaser's inventory:

Which of the following inventory costing methods will always result in the same values for ending inventory and cost of goods sold regardless of whether a perpetual or periodic inventory system is used?

Monarch Company uses a weighted-average perpetual inventory system and has the following purchases and sales: january 1 20 units were purchased at \ 10 per unit. January 12 12 units were sold. january 20 18 units were purchased at \ 11 per unit. What is the value of cost of goods sold?

Eastview Company uses a periodic LIFO inventory system,and has the following purchases and sales: What is the value of ending inventory?

A company's total cost of inventory was $329,000 and its current replacement cost is $307,000.Under the lower cost or market,the amount reported should be $329,000.

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

Days' sales in inventory:

A company's inventory records indicate the following data for the month of January: If the company uses the last-in,first-out perpetual inventory system,what is the amount of cost of goods sold for January?

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

A company must disclose any change in its inventory costing method in its financial statements.

Goods on consignment are goods that are shipped by the owner,called the ,to another party called the that will sell the goods for the owner.

Goods that are in transit and were shipped FOB shipping point should be included in the inventory records of the ________.

If the seller is responsible for paying freight charges,then ownership of inventory passes when goods arrive at their destination.

Beckenworth had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its days' sales in inventory equals: (Use 365 days a year.)

The overstatement of the ending inventory balance causes:

IFRS reporting currently does not allow which method of inventory costing?

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 5: Reporting and Analyzing Inventories

Goods in transit are included in a purchaser's inventory:

Which of the following inventory costing methods will always result in the same values for ending inventory and cost of goods sold regardless of whether a perpetual or periodic inventory system is used?

Monarch Company uses a weighted-average perpetual inventory system and has the following purchases and sales: january 1 20 units were purchased at \ 10 per unit. January 12 12 units were sold. january 20 18 units were purchased at \ 11 per unit. What is the value of cost of goods sold?

Eastview Company uses a periodic LIFO inventory system,and has the following purchases and sales: What is the value of ending inventory?

A company's total cost of inventory was $329,000 and its current replacement cost is $307,000.Under the lower cost or market,the amount reported should be $329,000.

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

Days' sales in inventory:

A company's inventory records indicate the following data for the month of January: If the company uses the last-in,first-out perpetual inventory system,what is the amount of cost of goods sold for January?

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

A company must disclose any change in its inventory costing method in its financial statements.

Goods on consignment are goods that are shipped by the owner,called the ________,to another party called the ________ that will sell the goods for the owner.

Goods that are in transit and were shipped FOB shipping point should be included in the inventory records of the ________.

If the seller is responsible for paying freight charges,then ownership of inventory passes when goods arrive at their destination.

Beckenworth had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its days' sales in inventory equals: (Use 365 days a year.)

The overstatement of the ending inventory balance causes:

IFRS reporting currently does not allow which method of inventory costing?

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Goods on consignment are goods that are shipped by the owner,called the ,to another party called the that will sell the goods for the owner.