Question 1

Nick's Place recorded the following data:   The weighted average unit cost of the inventory at January 31 is:

Accepted Answer

A)  $2.50. 
B)  $2.75. 
C)  $2.81. 
D)  $3.400. 
A)  $2.50. 
B)  $2.75. 
C)  $2.81. 
D)  $3.400.

Question 2

In a period of rising prices, FIFO will have

Accepted Answer

A)  lower net income than LIFO. 
B)  lower cost of goods sold than LIFO. 
C)  lower income tax expense than LIFO. 
D)  lower net purchases than LIFO. 
A)  lower net income than LIFO. 
B)  lower cost of goods sold than LIFO. 
C)  lower income tax expense than LIFO. 
D)  lower net purchases than LIFO.

Question 3

______________ is calculated as cost of goods sold divided by average inventory.

Accepted Answer

The answer of ______________ is calculated as cost of goods...

Question 4

Inventories are defined by IFRS as

Accepted Answer

A)  held-for-sale in the ordinary course of business. 
B)  in the process of production for sale in the ordinary course of business. 
C)  in the form of materials or supplies to be consumed in the production process or in the providing of services. 
D)  All of these answers are correct.
IFRS: 
A)  held-for-sale in the ordinary course of business. 
B)  in the process of production for sale in the ordinary course of business. 
C)  in the form of materials or supplies to be consumed in the production process or in the providing of services. 
D)  All of these answers are correct.
IFRS:

Question 5

Match between columns
                        Premises: The same unit cost is used to value ending inventory and cost of goods sold.
Goods ready for sale to customers by retailers and wholesalers.
Ending inventory valuation consists of the most recent inventory purchases.
Title to the goods transfers when the public carrier accepts the goods from the seller.
Measures the number of times the inventory sold during the period.
Goods that are only partially completed in a manufacturing company.
Cost of goods sold consists of the most recent inventory purchases.
Tracks the actual physical flow for each inventory item available for sale.
Title to goods transfers when the goods are delivered to the buyer.
Net amount that a company expects to receive from the sale of inventory.

Accepted Answer

The Answer of Merchandise Inventory and Average-cost method and Inventory is...

Question 6

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $64; Second purchase $76; Third purchase $68. If the company sold two units for a total of $200 and used FIFO costing, the gross profit for the period would be

Accepted Answer

A)  $56. 
B)  $60. 
C)  $62. 
D)  $68. 
A)  $56. 
B)  $60. 
C)  $62. 
D)  $68.

Question 7

Under generally accepted accounting principles, management has the choice of physically counting inventory on hand at the end of the year or using the gross profit method to estimate the ending inventory.

Accepted Answer

A) True 
 B)False

Question 8

Days in inventory is calculated by dividing

Accepted Answer

A)  the inventory turnover by 365 days. 
B)  average inventory by 365 days. 
C)  365 days by the inventory turnover. 
D)  365 days by average inventory. 
A)  the inventory turnover by 365 days. 
B)  average inventory by 365 days. 
C)  365 days by the inventory turnover. 
D)  365 days by average inventory.

Question 9

Stengel Company sells a snowboard, White-Out, that is popular with snowboard enthusiasts. Presented below is information relating to Stengel Company's purchases of White-Out snowboards during September. During the same month, 124 White-Out snowboards were sold at $160 each. Stengel Company uses a periodic inventory system.   Instructions
(a) Compute the ending inventory at September 30 and cost of goods sold using the FIFO and LIFO method. Prove the amount allocated to cost of goods sold under each method.
(b) For both FIFO and LIFO, calculate the sum of inventory and cost of goods sold. What do you notice about the answer you found for each method?
(c) What is gross profit under each method?
(d) Which method results in a larger amount reported for assets on the balance sheet? Which results in a larger amount reported for stockholders' equity on the balance sheet?

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& (b)
FIFO $2240 (ending inventory) + 1

Question 10

Cost of goods sold is computed from the following equation:

Accepted Answer

A)  beginning inventory - cost of goods purchased + ending inventory. 
B)  sales - cost of goods purchased + beginning inventory - ending inventory. 
C)  sales + gross profit - ending inventory + beginning inventory. 
D)  beginning inventory + cost of goods purchased - ending inventory. 
A)  beginning inventory - cost of goods purchased + ending inventory. 
B)  sales - cost of goods purchased + beginning inventory - ending inventory. 
C)  sales + gross profit - ending inventory + beginning inventory. 
D)  beginning inventory + cost of goods purchased - ending inventory.

Question 11

The cost of goods available for sale is allocated to the cost of goods sold and the

Accepted Answer

A)  beginning inventory. 
B)  ending inventory. 
C)  cost of goods purchased. 
D)  gross profit. 
A)  beginning inventory. 
B)  ending inventory. 
C)  cost of goods purchased. 
D)  gross profit.

Question 12

The only acceptable cost flow assumptions under IFRS are

Accepted Answer

A)  FIFO and LIFO. 
B)  FIFO and average. 
C)  LIFO and average. 
D)  FIFO, LIFO and average.
IFRS: 
A)  FIFO and LIFO. 
B)  FIFO and average. 
C)  LIFO and average. 
D)  FIFO, LIFO and average.
IFRS:

Question 13

Specific Identification must be used for inventory valuation where the inventory items are not interchangeable under   IFRS:

Accepted Answer

The answer of Specific Identification must be used for inventory...

Question 14

The cost of goods available for sale consists of the beginning inventory plus the cost of goods purchased.

Accepted Answer

A) True 
 B)False

Question 15

LIFO can be used

Accepted Answer

A)  under neither GAAP nor IFRS. 
B)  under IFRS but not GAAP. 
C)  under GAAP but not IFRS. 
D)  under both GAAP and IFRS.
IFRS: 
A)  under neither GAAP nor IFRS. 
B)  under IFRS but not GAAP. 
C)  under GAAP but not IFRS. 
D)  under both GAAP and IFRS.
IFRS:

Question 16

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

Accepted Answer

A) True 
 B)False

Question 17

IFRS defines net realizable value for lower-of-cost-or net realizable value as

Accepted Answer

A)  estimated selling price less costs to complete and sell. 
B)  estimated selling price in the normal course of business. 
C)  net market value. 
D)  replacement cost less costs of disposal.
IFRS: 
A)  estimated selling price less costs to complete and sell. 
B)  estimated selling price in the normal course of business. 
C)  net market value. 
D)  replacement cost less costs of disposal.
IFRS:

Question 18

Penny Company made an inventory count on December 31, 2018. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2018, the effects of this error are

Accepted Answer

The answer of Penny Company made an inventory count on...

Question 19

Certain agricultural and mineral products can be reported at net realizable value under   IFRS:

Accepted Answer

The answer of Certain agricultural and mineral products can be...

Question 20

At May 1, 2018, Kibbee Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows: 800 units at $7
600 units at $8
The company sold 1,000 units during the month for $12 per unit. Kibbee uses the average cost method. Kibbee's gross profit for the month of May is

Accepted Answer

A)  $4,625. 
B)  $4,571. 
C)  $4,000. 
D)  $4,500. 
A)  $4,625. 
B)  $4,571. 
C)  $4,000. 
D)  $4,500.

Nick's Place recorded the following data: The weighted average unit cost of the inventory at January 31 is:

In a period of rising prices, FIFO will have

______________ is calculated as cost of goods sold divided by average inventory.

Inventories are defined by IFRS as

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $64; Second purchase $76; Third purchase $68. If the company sold two units for a total of $200 and used FIFO costing, the gross profit for the period would be

Under generally accepted accounting principles, management has the choice of physically counting inventory on hand at the end of the year or using the gross profit method to estimate the ending inventory.

Days in inventory is calculated by dividing

Cost of goods sold is computed from the following equation:

The cost of goods available for sale is allocated to the cost of goods sold and the

The only acceptable cost flow assumptions under IFRS are

Specific Identification must be used for inventory valuation where the inventory items are not interchangeable under IFRS:

The cost of goods available for sale consists of the beginning inventory plus the cost of goods purchased.

LIFO can be used

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

IFRS defines net realizable value for lower-of-cost-or net realizable value as

Penny Company made an inventory count on December 31, 2018. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2018, the effects of this error are

Certain agricultural and mineral products can be reported at net realizable value under IFRS:

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

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Exam 6: Inventories

Nick's Place recorded the following data: The weighted average unit cost of the inventory at January 31 is:

In a period of rising prices, FIFO will have

______________ is calculated as cost of goods sold divided by average inventory.

Inventories are defined by IFRS as

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $64; Second purchase $76; Third purchase $68. If the company sold two units for a total of $200 and used FIFO costing, the gross profit for the period would be

Under generally accepted accounting principles, management has the choice of physically counting inventory on hand at the end of the year or using the gross profit method to estimate the ending inventory.

Days in inventory is calculated by dividing

Cost of goods sold is computed from the following equation:

The cost of goods available for sale is allocated to the cost of goods sold and the

The only acceptable cost flow assumptions under IFRS are

Specific Identification must be used for inventory valuation where the inventory items are not interchangeable under IFRS:

The cost of goods available for sale consists of the beginning inventory plus the cost of goods purchased.

LIFO can be used

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

IFRS defines net realizable value for lower-of-cost-or net realizable value as

Penny Company made an inventory count on December 31, 2018. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2018, the effects of this error are

Certain agricultural and mineral products can be reported at net realizable value under IFRS:

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters