Question 1

The cost of goods sold account is which of the following?

Accepted Answer

A)  a contra-asset 
B)  an asset 
C)  an expense 
D)  an extraordinary item 
A)  a contra-asset 
B)  an asset 
C)  an expense 
D)  an extraordinary item

Question 2

In order to determine cost of goods sold in a periodic inventory system we

Accepted Answer

A)  subtract purchases from ending inventory. 
B)  add purchases to beginning inventory. 
C)  subtract ending inventory from beginning inventory. 
D)  subtract ending inventory from cost of goods available for sale. 
A)  subtract purchases from ending inventory. 
B)  add purchases to beginning inventory. 
C)  subtract ending inventory from beginning inventory. 
D)  subtract ending inventory from cost of goods available for sale.

Question 3

Which of the following businesses would not have cost of goods sold?

Accepted Answer

A)  A jewellery store 
B)  A manufacturer of batteries 
C)  A grocery store 
D)  A movie theatre 
A)  A jewellery store 
B)  A manufacturer of batteries 
C)  A grocery store 
D)  A movie theatre

Question 4

House Depot Company hired a new store manager in March 20C, who determined the ending inventory on December 31, 20C, to be $20,000. In March, 20E the company discovered that the 20C ending inventory should have been $28,000. The December 31, 20D, inventory was correct. Ignore income taxes.
Complete the following table to show the effects of the inventory error on the four amounts listed. Give the amount of the discrepancy and indicate whether it was overstated (O), understated (U), or had no effect (N).

Accepted Answer

The answer of House Depot Company hired a new store...

Question 5

Richardson Ltd. sells many products. Hela is one of its popular items. Below is an analysis of the inventory purchases and sales of Hela for the month of March. Richardson uses the perpetual inventory system.
   Requirements:
(a) Using the FIFO cost formula, calculate the amount of the cost of goods sold for March. (Show calculations)
(b) Using the average cost formula, calculate the amount of the ending inventory on March 31. (Sho calculations)

Accepted Answer

@#IMG-DLM& Please note that rounding dis

Question 6

Match the inventory system with the statement by entering the appropriate letters the left:
A. Perpetual inventory system.
B. Periodic inventory system.
C. Neither of the above is correct.
D. Both A and B are correct.

Accepted Answer

1. A; 2. B; 3. C; 4.

Question 7

Assume World Company buys compact disks at a unit cost of $10 and sells them at a unit price of
$13. There was no beginning inventory.
Provide the journal entries required below by entering the account code of the appropriate account and the amount for each debit and credit:

Accepted Answer

The answer of Assume World Company buys compact disks at...

Question 8

The cost of goods purchased for resale should include all amounts that are the responsibility of the purchaser for freight and handling charges in order to get the goods to the purchaser's intended location.

Accepted Answer

A) True 
 B)False

Question 9

Landings Inc. provided the following footnote in their annual report:
Inventories are stated at the lower of cost or net realizable value. The cost of inventories has been determined using last in first out (FIFO) method. Cost of goods sold under FIFO costing were $22.2 billion for 20B and ending inventory under FIFO was $1.3 billion. Inventory in 20A under FIFO costing was $1.2 billion.
Compute the following for Landings:

Accepted Answer

1) 22.2 + 1.3 = 23.5

Question 10

An increase in inventory turnover means, days in inventory

Accepted Answer

A)  increases. 
B)  remains the same. 
C)  decreases. 
D)  cannot be determined. 
A)  increases. 
B)  remains the same. 
C)  decreases. 
D)  cannot be determined.

Question 11

Compute the missing amounts for the income statement for each independent case.

Accepted Answer

The answer of Compute the missing amounts for the income...

Question 12

The records of Tea Time Company show 20B purchases of $9,000. An actual count revealed a 20B ending inventory of $4,000. The 20B beginning inventory was $5,000. What was the cost of goods sold for 20B? $________

Accepted Answer

$5,000 + $

Question 13

Which of the following is true?

Accepted Answer

A)  Factory overhead consists of manufacturing costs other than direct materials and direct labour. 
B)  Purchases discounts increase sales revenue to arrive at net sales. 
C)  Net realizable value is the expected sales price plus selling costs. 
D)  FIFO Reserve is a contra sales account for the excess of FIFO over weighted-average inventory. 
A)  Factory overhead consists of manufacturing costs other than direct materials and direct labour. 
B)  Purchases discounts increase sales revenue to arrive at net sales. 
C)  Net realizable value is the expected sales price plus selling costs. 
D)  FIFO Reserve is a contra sales account for the excess of FIFO over weighted-average inventory.

Question 14

Joe Company sold merchandise with an invoice price of $1,000 to Gibbs, Inc., with terms of 2/10, n/30. Which of the following is the correct entry for Joe Company to record the collection from Gibbs within 30 days if the company uses the periodic inventory system?

Accepted Answer

A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D 
A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D

Question 15

When ending inventory is smaller than beginning inventory, gross margin is less than, if ending inventory were larger than beginning inventory (assuming purchases remain constant).

Accepted Answer

A) True 
 B)False

Question 16

The results under FIFO in a perpetual inventory system are the same as in a periodic inventory system.

Accepted Answer

A) True 
 B)False

Question 17

All three methods of inventory cost determination will produce the same cumulative cost of goods sold over the life cycle of the business.

Accepted Answer

A) True 
 B)False

Question 18

Two systems are used in accounting for inventory-perpetual and periodic. Which of the following statements is correct?

Accepted Answer

A)  In a periodic inventory system, cost of goods sold is developed from a comparison of beginning inventory and ending inventory only. 
B)  In a perpetual inventory system, the inventory account is not changed for each purchase during the accounting period. 
C)  In a perpetual inventory system, cost of goods sold is recorded at the time of each sale during the accounting period. 
D)  In a periodic inventory system, the inventory account is increased for each purchase during the accounting period. 
A)  In a periodic inventory system, cost of goods sold is developed from a comparison of beginning inventory and ending inventory only. 
B)  In a perpetual inventory system, the inventory account is not changed for each purchase during the accounting period. 
C)  In a perpetual inventory system, cost of goods sold is recorded at the time of each sale during the accounting period. 
D)  In a periodic inventory system, the inventory account is increased for each purchase during the accounting period.

Question 19

David Company uses the gross method to record its credit purchases, and it uses the periodic inventory system. On July 21, 20D, the company purchased goods that had an invoice price of $3,000 with terms of 3/10, n/30. If payment in full is made on July 30, the journal entries to record the purchase and payment should be which of the following?

Accepted Answer

A)  Entry A 
B)  Entry B 
C)  Entry C 
D)  Entry D 
A)  Entry A 
B)  Entry B 
C)  Entry C 
D)  Entry D

Question 20

Joe Company sold merchandise with an invoice price of $1,000 to Gibbs, Inc., with terms of 2/10, n/30. Which of the following is the correct entry for Joe Company to record the payment by Gibbs within the 10 days if the company uses the periodic inventory system and the gross method to record purchases?

Accepted Answer

A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D 
A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D

The cost of goods sold account is which of the following?

In order to determine cost of goods sold in a periodic inventory system we

Which of the following businesses would not have cost of goods sold?

Match the inventory system with the statement by entering the appropriate letters the left: A. Perpetual inventory system. B. Periodic inventory system. C. Neither of the above is correct. D. Both A and B are correct.

Assume World Company buys compact disks at a unit cost of $10 and sells them at a unit price of $13. There was no beginning inventory. Provide the journal entries required below by entering the account code of the appropriate account and the amount for each debit and credit:

The cost of goods purchased for resale should include all amounts that are the responsibility of the purchaser for freight and handling charges in order to get the goods to the purchaser's intended location.

An increase in inventory turnover means, days in inventory

Compute the missing amounts for the income statement for each independent case.

The records of Tea Time Company show 20B purchases of $9,000. An actual count revealed a 20B ending inventory of $4,000. The 20B beginning inventory was $5,000. What was the cost of goods sold for 20B? $________

Which of the following is true?

Joe Company sold merchandise with an invoice price of $1,000 to Gibbs, Inc., with terms of 2/10, n/30. Which of the following is the correct entry for Joe Company to record the collection from Gibbs within 30 days if the company uses the periodic inventory system?

When ending inventory is smaller than beginning inventory, gross margin is less than, if ending inventory were larger than beginning inventory (assuming purchases remain constant).

The results under FIFO in a perpetual inventory system are the same as in a periodic inventory system.

All three methods of inventory cost determination will produce the same cumulative cost of goods sold over the life cycle of the business.

Two systems are used in accounting for inventory-perpetual and periodic. Which of the following statements is correct?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

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Exam 8: Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

The cost of goods sold account is which of the following?

In order to determine cost of goods sold in a periodic inventory system we

Which of the following businesses would not have cost of goods sold?

Match the inventory system with the statement by entering the appropriate letters the left: A. Perpetual inventory system. B. Periodic inventory system. C. Neither of the above is correct. D. Both A and B are correct.

Assume World Company buys compact disks at a unit cost of $10 and sells them at a unit price of $13. There was no beginning inventory. Provide the journal entries required below by entering the account code of the appropriate account and the amount for each debit and credit:

The cost of goods purchased for resale should include all amounts that are the responsibility of the purchaser for freight and handling charges in order to get the goods to the purchaser's intended location.

An increase in inventory turnover means, days in inventory

Compute the missing amounts for the income statement for each independent case.

The records of Tea Time Company show 20B purchases of $9,000. An actual count revealed a 20B ending inventory of $4,000. The 20B beginning inventory was $5,000. What was the cost of goods sold for 20B? $________

Which of the following is true?

Joe Company sold merchandise with an invoice price of $1,000 to Gibbs, Inc., with terms of 2/10, n/30. Which of the following is the correct entry for Joe Company to record the collection from Gibbs within 30 days if the company uses the periodic inventory system?

When ending inventory is smaller than beginning inventory, gross margin is less than, if ending inventory were larger than beginning inventory (assuming purchases remain constant).

The results under FIFO in a perpetual inventory system are the same as in a periodic inventory system.

All three methods of inventory cost determination will produce the same cumulative cost of goods sold over the life cycle of the business.

Two systems are used in accounting for inventory-perpetual and periodic. Which of the following statements is correct?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters