A company had the following ending inventory costs: $\begin{array}{|l|l|c|c|} \hline \text { Product } & \text { Units Available } & \text { Cost } & \text { Market } \\ \hline \text { A } & 10 & \$ 5 & \$ 6 \\ \hline \text { B } & 50 & 8 & 7 \\ \hline \text { C } & 35 & 10 & 11 \\ \hline \end{array}$ Instructions: (a) Calculate the lower of cost or market (LCM) value for the inventory as a whole. (b) Calculate the lower of cost or market (LCM) value for each individual item.

The answer of A company had the following ending inventory...

A) Are required by Congress. B) Are necessary to achieve full disclosure about a business's operations. C) Are usually monthly or quarterly statements prepared in between the traditional, annual statement dates. D) Require the use of the perpetual method for inventories. E) Cannot be prepared if the company follows the conservatism principle. A) Are required by Congress. B) Are necessary to achieve full disclosure about a business's operations. C) Are usually monthly or quarterly statements prepared in between the traditional, annual statement dates. D) Require the use of the perpetual method for inventories. E) Cannot be prepared if the company follows the conservatism principle.

A company reported the following data related to its ending inventory: $\begin{array}{|l|l|c|c|} \hline \text { Product } & \text { Units Available } & \text { Cost } & \text { Market } \\ \hline 849 & 100 & \$ 10 & \$ 11 \\ \hline 842 & 75 & 16 & 14 \\ \hline 847 & 60 & 14 & 13 \\ \hline 860 & 40 & 16 & 20 \\ \hline \end{array}$ Calculate the lower of cost or-market on both the: (a) Inventory as a whole. (b) Inventory applied separately to each product.

@#IMG-DLM& (a) LCM applied to inventory

Exam 5: Accounting for Inventories

Given the following information, determine the cost of ending inventory at December 31 using the LIFO perpetual inventory method. December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units were sold at $35 per unit.

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(Multiple Choice)

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Question 1

Correct Answer:

Verified

LIFO assumes that inventory costs flow in the order they were incurred.

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(True/False)

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Question 2

Correct Answer:

Verified

False

Three key variables determine the dollar value of inventory: (1) inventory quantity, (2) costs of inventory, and (3) cost flow assumption.

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(True/False)

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Question 3

Correct Answer:

Verified

True

A company had the following ending inventory costs: Product Units Available Cost Market A 10 \ 5 \ 6 B 50 8 7 C 35 10 11 Instructions: (a) Calculate the lower of cost or market (LCM) value for the inventory as a whole. (b) Calculate the lower of cost or market (LCM) value for each individual item.

(Essay)

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Question 4

An overstated beginning inventory will __ cost of goods sold and _ net income.

(Short Answer)

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Question 5

Given the following information, determine the cost of goods sold at November 30 using the weighted-average perpetual inventory method. November 3: 15 units were purchased at $8 per unit. November 11: 18 units were purchased at $9.50 per unit. November 15: 15 units were sold at $45 per unit. November 18: 30 units were purchased at $10.75 per unit. November 30: 20 units were sold at $55 per.

(Essay)

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Question 6

Given the following information, determine the cost of ending inventory at December 31 using the weighted-average perpetual inventory method. December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units were sold at $35 per unit.

(Multiple Choice)

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Question 7

The assignment of costs to cost of goods sold and inventory using weighted average usually yields different results depending on whether a perpetual or periodic system is used

(True/False)

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Question 8

A company's warehouse was destroyed by a tornado on March 15. The following information was salvaged from the ruins: Inventory, beginning: $28,000 Purchases for the period: $17,000 Sales for the period: $55,000 Sales returns for the period: $700 The company's average gross profit ratio is 35%. What is the estimated cost of the lost inventory?

(Multiple Choice)

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Question 9

The Inventory account is a controlling account for the inventory subsidiary ledger that contains a separate record for each individual product.

(True/False)

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Question 10

A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows: If the ending inventory is reported at $276, which inventory method was used?

(Multiple Choice)

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Question 11

A company can change its inventory costing method without mentioning this change in its financial statements since it is a decision made by internal management.

(True/False)

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Question 12

In a period of rising prices, FIFO usually gives a lower taxable income, which leads to an advantage when it comes to paying income tax.

(True/False)

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Question 13

During January, a company that uses a perpetual inventory system had beginning inventory, purchases and sales as follows. What was the FIFO cost of the company's January 31 inventory?

(Essay)

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Question 14

Managers are able to make important decisions correctly using erroneous inventory balances because inventory errors are self-correcting and, as a result, are less serious.

(True/False)

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Question 15

Interim statements:

(Multiple Choice)

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Question 16

A company reported the following data related to its ending inventory: Product Units Available Cost Market 849 100 \ 10 \ 11 842 75 16 14 847 60 14 13 860 40 16 20 Calculate the lower of cost or-market on both the: (a) Inventory as a whole. (b) Inventory applied separately to each product.

(Essay)

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Question 17

Identify the items that are included in merchandise inventory. (In your answer address the special situations of goods in transit, consigned goods, and damaged goods.)

(Essay)

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Question 18

The matching principle is used by some companies to avoid allocating incidental inventory costs to cost of goods sold.

(True/False)

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Question 19

Derick Pearson and Felecia Hatcher founded Feverish Ice Cream. Why is managing inventory an important issue for their company?

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Question 20

Showing 1 - 20 of 191

LIFO assumes that inventory costs flow in the order they were incurred.

Three key variables determine the dollar value of inventory: (1) inventory quantity, (2) costs of inventory, and (3) cost flow assumption.

A company had the following ending inventory costs: Product Units Available Cost Market A 10 \ 5 \ 6 B 50 8 7 C 35 10 11 Instructions: (a) Calculate the lower of cost or market (LCM) value for the inventory as a whole. (b) Calculate the lower of cost or market (LCM) value for each individual item.

An overstated beginning inventory will __ cost of goods sold and _ net income.

The assignment of costs to cost of goods sold and inventory using weighted average usually yields different results depending on whether a perpetual or periodic system is used

The Inventory account is a controlling account for the inventory subsidiary ledger that contains a separate record for each individual product.

A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows: If the ending inventory is reported at $276, which inventory method was used?

A company can change its inventory costing method without mentioning this change in its financial statements since it is a decision made by internal management.

In a period of rising prices, FIFO usually gives a lower taxable income, which leads to an advantage when it comes to paying income tax.

During January, a company that uses a perpetual inventory system had beginning inventory, purchases and sales as follows. What was the FIFO cost of the company's January 31 inventory?

Managers are able to make important decisions correctly using erroneous inventory balances because inventory errors are self-correcting and, as a result, are less serious.

Interim statements:

A company reported the following data related to its ending inventory: Product Units Available Cost Market 849 100 \ 10 \ 11 842 75 16 14 847 60 14 13 860 40 16 20 Calculate the lower of cost or-market on both the: (a) Inventory as a whole. (b) Inventory applied separately to each product.

Identify the items that are included in merchandise inventory. (In your answer address the special situations of goods in transit, consigned goods, and damaged goods.)

The matching principle is used by some companies to avoid allocating incidental inventory costs to cost of goods sold.

Derick Pearson and Felecia Hatcher founded Feverish Ice Cream. Why is managing inventory an important issue for their company?

Introducing Financial Accounting

Accounting for Transactions

Preparing Financial Statements

Accounting for Merchandising Operations

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 5: Accounting for Inventories

LIFO assumes that inventory costs flow in the order they were incurred.

Three key variables determine the dollar value of inventory: (1) inventory quantity, (2) costs of inventory, and (3) cost flow assumption.

A company had the following ending inventory costs: Product Units Available Cost Market A 10 \ 5 \ 6 B 50 8 7 C 35 10 11 Instructions: (a) Calculate the lower of cost or market (LCM) value for the inventory as a whole. (b) Calculate the lower of cost or market (LCM) value for each individual item.

An overstated beginning inventory will ______________ cost of goods sold and _____________ net income.

The assignment of costs to cost of goods sold and inventory using weighted average usually yields different results depending on whether a perpetual or periodic system is used

The Inventory account is a controlling account for the inventory subsidiary ledger that contains a separate record for each individual product.

A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows: If the ending inventory is reported at $276, which inventory method was used?

A company can change its inventory costing method without mentioning this change in its financial statements since it is a decision made by internal management.

In a period of rising prices, FIFO usually gives a lower taxable income, which leads to an advantage when it comes to paying income tax.

During January, a company that uses a perpetual inventory system had beginning inventory, purchases and sales as follows. What was the FIFO cost of the company's January 31 inventory?

Managers are able to make important decisions correctly using erroneous inventory balances because inventory errors are self-correcting and, as a result, are less serious.

Interim statements:

A company reported the following data related to its ending inventory: Product Units Available Cost Market 849 100 \ 10 \ 11 842 75 16 14 847 60 14 13 860 40 16 20 Calculate the lower of cost or-market on both the: (a) Inventory as a whole. (b) Inventory applied separately to each product.

Identify the items that are included in merchandise inventory. (In your answer address the special situations of goods in transit, consigned goods, and damaged goods.)

The matching principle is used by some companies to avoid allocating incidental inventory costs to cost of goods sold.

Derick Pearson and Felecia Hatcher founded Feverish Ice Cream. Why is managing inventory an important issue for their company?

Introducing Financial Accounting

Accounting for Transactions

Preparing Financial Statements

Accounting for Merchandising Operations

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

An overstated beginning inventory will __ cost of goods sold and _ net income.