Question 1

The selection of an appropriate inventory cost flow assumption for an individual company is made by

Accepted Answer

A) the external auditors. 
B) the SEC. 
C) the internal auditors. 
D) management. 
A) the external auditors. 
B) the SEC. 
C) the internal auditors. 
D) management.

Question 2

A low number of days in inventory may indicate all of the following except

Accepted Answer

A) Sales opportunities may be lost because of inventory shortages. 
B) There is less chance of having obsolete inventory items. 
C) The company has fewer funds tied up in inventory. 
D) Management has achieved the best balance between too much and too little inventory levels. 
A) Sales opportunities may be lost because of inventory shortages. 
B) There is less chance of having obsolete inventory items. 
C) The company has fewer funds tied up in inventory. 
D) Management has achieved the best balance between too much and too little inventory levels.

Question 3

Hogan Industries had the following inventory transactions occur during 2017: $\begin{array}{rlll}&&\text { Units } & \text { Cost/unit } \
\text { Feb. 1,2017 } & \text { Purchase } & 108 & \$ 45 \
\text { Mar. 14,2017 } & \text { Purchase } & 186 & \$ 47 \
\text { May } 1,2017 & \text { Purchase } & 132 & \$ 49
\end{array}$ The company sold 306 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

Accepted Answer

A) $14,646 
B) $14,190 
C) $5,088 
D) $4,632 
A) $14,646 
B) $14,190 
C) $5,088 
D) $4,632

Question 4

Given equal circumstances, which inventory method would probably be the most time consuming?

Accepted Answer

A) FIFO 
B) LIFO 
C) Average cost 
D) Specific identification. 
A) FIFO 
B) LIFO 
C) Average cost 
D) Specific identification.

Question 5

Under GAAP, companies can choose which inventory system?

Accepted Answer

The answer of Under GAAP, companies can choose which inventory...

Question 6

Consigned goods are held for sale by one party although ownership of the goods is retained by another party.

Accepted Answer

A) True 
 B)False

Question 7

Quiet Phones Company has the following inventory data: $$\begin{array} { r l l r } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 &  { 330 }\&&&{ \$ 3,000 }
\end{array}$$ A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is

Accepted Answer

A) $930. 
B) $990. 
C) $2,010. 
D) $2,070. 
A) $930. 
B) $990. 
C) $2,010. 
D) $2,070.

Question 8

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 9

Which of the following terms best describes the assumption made in applying the four inventory methods?

Accepted Answer

A) Goods flow 
B) Cost flow 
C) Asset flow 
D) Physical flow 
A) Goods flow 
B) Cost flow 
C) Asset flow 
D) Physical flow

Question 10

Carryable CDs has the following inventory data: $\begin{array}{rll}
\text { Nov. } 1 & \text { Inventory } & 30 \text { units } @ \$ 6.00 \text { each } \
8 & \text { Purchase } & 120 \text { units } @ \$ 6.45 \text { each } \
17 & \text { Purchase } & 60 \text { units } @ \$ 6.30 \text { each } \
25 & \text { Purchase } & 90 \text { units } @ \$ 6.60 \text { each }
\end{array}$ A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Cost of goods sold under LIFO is

Accepted Answer

A) $657 
B) $1,269 
C) $632 
D) $1,295 
A) $657 
B) $1,269 
C) $632 
D) $1,295

Question 11

Snug-As-A-Bug Blankets has the following inventory data: $$\begin{array} { r l c } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 60 \
5 & \text { Purchases } & 180 \text { units at } \$ 56 \
14 & \text { Sale } & 120 \text { units } \
21 & \text { Purchases } & 90 \text { units at } \$ 58 \
30 & \text { Sale } & 84 \text { units }
\end{array}$$ Assuming that a perpetual inventory system is used, what is the ending inventory on a LIFO basis for July?

Accepted Answer

A) $5,496 
B) $5,508 
C) $5,544. 
D) $5,796 
A) $5,496 
B) $5,508 
C) $5,544. 
D) $5,796

Question 12

Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows: $\begin{array}{llrr}&\text { Units } &\text { Per unit price }&\text { Total }\
\text { Balance, } 1 / 1 / 2017 & 300 & \$ 5.00 & \$ 1.500 \
\text { Purchase, } 1 / 15 / 2017 & 150 & 5.30 & 795 \
\text { Purchase, } 1 / 28 / 2017 & 150 & 5.50 & 825
\end{array}$ An end of the month (1/31/2017) inventory showed that 240 units were on hand. If the company uses FIFO and sells the units for $10 each, what is the gross profit for the month?

Accepted Answer

A) $1,782 
B) $1,818 
C) $3,600 
D) $2,400 
A) $1,782 
B) $1,818 
C) $3,600 
D) $2,400

Question 13

The following information was available for Camara Company at December 31, 2017: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $630,000; and sales $900,000. Camara's days in inventory in 2017 was

Accepted Answer

A) 40.6 days. 
B) 46.2 days. 
C) 57.9 days. 
D) 68.9 days. 
A) 40.6 days. 
B) 46.2 days. 
C) 57.9 days. 
D) 68.9 days.

Question 14

A company may use more than one inventory cost flow method at the same time.

Accepted Answer

A) True 
 B)False

Question 15

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $270 and used FIFO costing, the gross profit for the period would be

Accepted Answer

A) $95. 
B) $105. 
C) $90. 
D) $80. 
A) $95. 
B) $105. 
C) $90. 
D) $80.

Question 16

Hoover Company had beginning inventory of $15,000 at March 1, 2017. During the month, the company made purchases of $65,000. The inventory at the end of the month is $17,300. What is cost of goods sold for the month of March?

Accepted Answer

A) $62,700 
B) $65,000 
C) $80,000 
D) $82,300 
A) $62,700 
B) $65,000 
C) $80,000 
D) $82,300

Question 17

Specific Identification can be used for inventory valuation under

Accepted Answer

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

Question 18

Charlene Cosmetics Company just began business and made the following four inventory purchases in June: $\begin{array}{lrlr}
\text { June } & 1 & 150 \text { units } & \$ 1,040 \
\text { June } & 10 & 200 \text { units } & 1,560 \
\text { June } & 15 & 200 \text { units } & 1,680 \
\text { June } &28 & 150 \text { units } & 1,320 \
&&&\$5,600
\end{array}$ A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the average cost method, the amount allocated to the ending inventory on June 30 is

Accepted Answer

A) $1,639. 
B) $1,824. 
C) $1,764. 
D) $1,680. 
A) $1,639. 
B) $1,824. 
C) $1,764. 
D) $1,680.

Question 19

Noise Makers Inc. has the following inventory data: $$\begin{array} { r l l r } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 &  { 330 }\&&&{ \$ 3,000 }
\end{array}$$ A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the average cost method, the value of ending inventory is

Accepted Answer

A) $930. 
B) $960. 
C) $976. 
D) $990. 
A) $930. 
B) $960. 
C) $976. 
D) $990.

Question 20

Snug-As-A-Bug Blankets has the following inventory data: $$\begin{array} { r l c } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 60 \
5 & \text { Purchases } & 180 \text { units at } \$ 56 \
14 & \text { Sale } & 120 \text { units } \
21 & \text { Purchases } & 90 \text { units at } \$ 58 \
30 & \text { Sale } & 84 \text { units }
\end{array}$$ Assuming that a perpetual inventory system is used, what is ending inventory (rounded) under the average cost method for July?

Accepted Answer

A) $5,500 
B) $5,568 
C) $4,812 
D) $5,544 
A) $5,500 
B) $5,568 
C) $4,812 
D) $5,544

The selection of an appropriate inventory cost flow assumption for an individual company is made by

A low number of days in inventory may indicate all of the following except

Given equal circumstances, which inventory method would probably be the most time consuming?

Under GAAP, companies can choose which inventory system?

Consigned goods are held for sale by one party although ownership of the goods is retained by another party.

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.

Which of the following terms best describes the assumption made in applying the four inventory methods?

The following information was available for Camara Company at December 31, 2017: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $630,000; and sales $900,000. Camara's days in inventory in 2017 was

A company may use more than one inventory cost flow method at the same time.

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $270 and used FIFO costing, the gross profit for the period would be

Hoover Company had beginning inventory of $15,000 at March 1, 2017. During the month, the company made purchases of $65,000. The inventory at the end of the month is $17,300. What is cost of goods sold for the month of March?

Specific Identification can be used for inventory valuation under

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 5: Reporting and Analyzing Inventory

The selection of an appropriate inventory cost flow assumption for an individual company is made by

A low number of days in inventory may indicate all of the following except

Given equal circumstances, which inventory method would probably be the most time consuming?

Under GAAP, companies can choose which inventory system?

Consigned goods are held for sale by one party although ownership of the goods is retained by another party.

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.

Which of the following terms best describes the assumption made in applying the four inventory methods?

The following information was available for Camara Company at December 31, 2017: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $630,000; and sales $900,000. Camara's days in inventory in 2017 was

A company may use more than one inventory cost flow method at the same time.

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $270 and used FIFO costing, the gross profit for the period would be

Hoover Company had beginning inventory of $15,000 at March 1, 2017. During the month, the company made purchases of $65,000. The inventory at the end of the month is $17,300. What is cost of goods sold for the month of March?

Specific Identification can be used for inventory valuation under

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters