Question 1

Goods out on consignment should be included in the inventory of the consignor.

Accepted Answer

A) True 
 B)False

Question 2

Hoyt Company's inventory records show the following data for the month of September:   A physical inventory on September 30 shows 200 units on hand. Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Accepted Answer

Ending inventory: (100 units ×

Question 3

Unitech has the following inventory information.   A physical count of merchandise inventory on July 31 reveals that there are 75 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

Accepted Answer

A)  $1,450. 
B)  $1,550. 
C)  $3,450. 
D)  $3,550. 
A)  $1,450. 
B)  $1,550. 
C)  $3,450. 
D)  $3,550.

Question 4

Which of the following should be included in the physical inventory of a company?

Accepted Answer

A)  Goods held on consignment from another company. 
B)  Goods in transit to another company shipped FOB shipping point. 
C)  Goods in transit from another company shipped FOB shipping point. 
D)  Both goods in transit to and from another company shipped FOB shipping point. 
A)  Goods held on consignment from another company. 
B)  Goods in transit to another company shipped FOB shipping point. 
C)  Goods in transit from another company shipped FOB shipping point. 
D)  Both goods in transit to and from another company shipped FOB shipping point.

Question 5

Jerry White is studying for the next accounting mid-term examination. What should Jerry know about (a) departing from the cost basis of accounting for inventories and (b) the meaning of "net realizable value" in the lower-of-cost-or- net realizable value method?

Accepted Answer

Jerry should know the following:
(a) A d

Question 6

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

Accepted Answer

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

Question 7

Paulson, Inc. has 8 computers which have been part of the inventory for over two years. Each computer cost ₤600 and originally retailed for ₤825. At the statement date, each computer has a net realizable value of ₤350. How much loss should Paulson, Inc., record for the year?

Accepted Answer

A)  ₤1,800. 
B)  ₤2,000. 
C)  ₤2,400. 
D)  ₤2,800. 
A)  ₤1,800. 
B)  ₤2,000. 
C)  ₤2,400. 
D)  ₤2,800.

Question 8

Rudolf Diesel Company's inventory records show the following data:   A physical inventory on December 31 shows 8,000 units on hand. Under the FIFO method, the December 31 inventory is

Accepted Answer

A)  $29,000. 
B)  $28,000. 
C)  $32,000. 
D)  $36,000. 
A)  $29,000. 
B)  $28,000. 
C)  $32,000. 
D)  $36,000.

Question 9

In a period of rising prices which inventory method generally provides the greatest amount of net income?

Accepted Answer

A)  Average-cost. 
B)  FIFO. 
C)  LISH. 
D)  Cannot be determined. 
A)  Average-cost. 
B)  FIFO. 
C)  LISH. 
D)  Cannot be determined.

Question 10

If beginning inventory is understated by $10,000, the effect of this error in the current period is

Accepted Answer

The answer of If beginning inventory is understated by $10,000,...

Question 11

At May 1, 2014, Deitrich Company had beginning inventory consisting of 200 units with a unit cost of €3.50. During May, the company purchased inventory as follows: 400 units at €3.50
600 units at €4.00
The company sold 1,000 units during the month for €6 per unit. Deitrich uses the average cost method. The value of Deitrich's inventory at May 31, 2014 is

Accepted Answer

A)  €700. 
B)  €750. 
C)  €800. 
D)  €4,500. 
A)  €700. 
B)  €750. 
C)  €800. 
D)  €4,500.

Question 12

The lower-of-cost-or-net realizable value basis of valuing inventories is an example of

Accepted Answer

A)  comparability. 
B)  the cost principle. 
C)  prudence. 
D)  consistency. 
A)  comparability. 
B)  the cost principle. 
C)  prudence. 
D)  consistency.

Question 13

One difference between IFRS and GAAP in valuing inventories is that

Accepted Answer

A)  Under IFRS, but not GAAP, inventories written down under LCNRV can be written back up to the original cost. 
B)  GAAP defines market value as replacement cost where IFRS defines market as the selling price. 
C)  GAAP strictly adheres to the historical cost concept and does not allow for write-downs of inventory values. 
D)  IFRS, but not GAAP, requires that inventories be valued at the lower of cost or market. 
A)  Under IFRS, but not GAAP, inventories written down under LCNRV can be written back up to the original cost. 
B)  GAAP defines market value as replacement cost where IFRS defines market as the selling price. 
C)  GAAP strictly adheres to the historical cost concept and does not allow for write-downs of inventory values. 
D)  IFRS, but not GAAP, requires that inventories be valued at the lower of cost or market.

Question 14

Transactions that affect inventories on hand have an effect on both the statement of financial position and the income statement.

Accepted Answer

A) True 
 B)False

Question 15

Holliday Company's inventory records show the following data:   A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for ₤3 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. What is the cost of goods available for sale?

Accepted Answer

A)  ₤5,250 
B)  ₤9,000 
C)  ₤11,250 
D)  ₤25,500 
A)  ₤5,250 
B)  ₤9,000 
C)  ₤11,250 
D)  ₤25,500

Question 16

Companies have 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 17

Aiwa Inc. uses the average-cost inventory method. In 2014, the company reported net income of ¥59,600,000. Had average-cost been used, the company would have reported net income of ¥58,900,000. Assuming a 25% tax rate, what is the impact of the inventory cost flow assumption on Aiwa's taxes for 2014?

Accepted Answer

A)  Aiwa would pay ¥175,000 less in taxes for 2014 as a result of using the average-cost inventory method rather than FIFO. 
B)  Aiwa would pay ¥525,000 less in taxes for 2014 as a result of using the average-cost inventory method rather than FIFO. 
C)  The inventory method does not impact the amount of income tax paid. 
D)  Not determinable without income before taxes. 
A)  Aiwa would pay ¥175,000 less in taxes for 2014 as a result of using the average-cost inventory method rather than FIFO. 
B)  Aiwa would pay ¥525,000 less in taxes for 2014 as a result of using the average-cost inventory method rather than FIFO. 
C)  The inventory method does not impact the amount of income tax paid. 
D)  Not determinable without income before taxes.

Question 18

If a company uses the FIFO cost assumption, the cost of goods sold for the period will be the same under a perpetual or periodic inventory system.

Accepted Answer

A) True 
 B)False

Question 19

The following information was available from the inventory records of Queen Company for July:   What should be the inventory reported on Queen's July 31 statement of financial position using the average-cost inventory method (round per unit amounts to two decimal places)?

Accepted Answer

A)  £54,000. 
B)  £58,800. 
C)  £59,220. 
D)  £63,000. 
A)  £54,000. 
B)  £58,800. 
C)  £59,220. 
D)  £63,000.

Question 20

During July, the following purchases and sales were made by James Company. There was no beginning inventory. James Company uses a perpetual inventory system.   Under the LIFO method, the cost of goods sold for each sale is:
July 13 July 22

Accepted Answer

A)  € 960 €450 
B)  1,125 390 
C)  900 360 
D)  975 450 
A)  € 960 €450 
B)  1,125 390 
C)  900 360 
D)  975 450

Goods out on consignment should be included in the inventory of the consignor.

Hoyt Company's inventory records show the following data for the month of September: A physical inventory on September 30 shows 200 units on hand. Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Unitech has the following inventory information. A physical count of merchandise inventory on July 31 reveals that there are 75 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

Which of the following should be included in the physical inventory of a company?

Jerry White is studying for the next accounting mid-term examination. What should Jerry know about (a) departing from the cost basis of accounting for inventories and (b) the meaning of "net realizable value" in the lower-of-cost-or- net realizable value method?

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

Paulson, Inc. has 8 computers which have been part of the inventory for over two years. Each computer cost ₤600 and originally retailed for ₤825. At the statement date, each computer has a net realizable value of ₤350. How much loss should Paulson, Inc., record for the year?

Rudolf Diesel Company's inventory records show the following data: A physical inventory on December 31 shows 8,000 units on hand. Under the FIFO method, the December 31 inventory is

In a period of rising prices which inventory method generally provides the greatest amount of net income?

If beginning inventory is understated by $10,000, the effect of this error in the current period is

The lower-of-cost-or-net realizable value basis of valuing inventories is an example of

One difference between IFRS and GAAP in valuing inventories is that

Transactions that affect inventories on hand have an effect on both the statement of financial position and the income statement.

Companies have 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.

If a company uses the FIFO cost assumption, the cost of goods sold for the period will be the same under a perpetual or periodic inventory system.

The following information was available from the inventory records of Queen Company for July: What should be the inventory reported on Queen's July 31 statement of financial position using the average-cost inventory method (round per unit amounts to two decimal places)?

During July, the following purchases and sales were made by James Company. There was no beginning inventory. James Company uses a perpetual inventory system. Under the LIFO method, the cost of goods sold for each sale is: July 13 July 22

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, Share Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Accounting Principles and Contingent Liabilities in Business Operations

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Exam 6: Inventories

Goods out on consignment should be included in the inventory of the consignor.

Hoyt Company's inventory records show the following data for the month of September: A physical inventory on September 30 shows 200 units on hand. Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Unitech has the following inventory information. A physical count of merchandise inventory on July 31 reveals that there are 75 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

Which of the following should be included in the physical inventory of a company?

Jerry White is studying for the next accounting mid-term examination. What should Jerry know about (a) departing from the cost basis of accounting for inventories and (b) the meaning of "net realizable value" in the lower-of-cost-or- net realizable value method?

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

Paulson, Inc. has 8 computers which have been part of the inventory for over two years. Each computer cost ₤600 and originally retailed for ₤825. At the statement date, each computer has a net realizable value of ₤350. How much loss should Paulson, Inc., record for the year?

Rudolf Diesel Company's inventory records show the following data: A physical inventory on December 31 shows 8,000 units on hand. Under the FIFO method, the December 31 inventory is

In a period of rising prices which inventory method generally provides the greatest amount of net income?

If beginning inventory is understated by $10,000, the effect of this error in the current period is

The lower-of-cost-or-net realizable value basis of valuing inventories is an example of

One difference between IFRS and GAAP in valuing inventories is that

Transactions that affect inventories on hand have an effect on both the statement of financial position and the income statement.

Companies have 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.

If a company uses the FIFO cost assumption, the cost of goods sold for the period will be the same under a perpetual or periodic inventory system.

The following information was available from the inventory records of Queen Company for July: What should be the inventory reported on Queen's July 31 statement of financial position using the average-cost inventory method (round per unit amounts to two decimal places)?

During July, the following purchases and sales were made by James Company. There was no beginning inventory. James Company uses a perpetual inventory system. Under the LIFO method, the cost of goods sold for each sale is: July 13 July 22

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, Share Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Accounting Principles and Contingent Liabilities in Business Operations

Filters