Question 1

What is the amount of the inventory at the end of the year using the FIFO method?

Accepted Answer

A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,585 
A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,585

Question 2

Unsold consigned merchandise should be included in the consignee's inventory.

Accepted Answer

A) True 
 B)False

Question 3

A purchase order establishes an initial record of the receipt of the inventory.

Accepted Answer

A) True 
 B)False

Question 4

Match each description to the appropriate cost flow assumption a-c).
-Assigns the same value to all inventory units

Accepted Answer

A) FIFO 
B) LIFO 
C) Weighted average 
A) FIFO 
B) LIFO 
C) Weighted average

Question 5

Match each description to the appropriate cost flow assumption a-c).
-Widely used for tax purposes

Accepted Answer

A) FIFO 
B) LIFO 
C) Weighted average 
A) FIFO 
B) LIFO 
C) Weighted average

Question 6

Three identical units of merchandise were purchased during March, as shown: $$\begin{array} { | c | l | l | l | } 
\hline & { \text { Steele Plate } } & \text { Units } & \text { Cost } \
\hline \text { Mar. } 3 & \text { Purchase } & 1 & \$ 830 \
\hline 10 & \text { Purchase } & 1 & 840 \
\hline 19 & \text { Purchase } & 1 & 880 \
\hline \text { Total } & & 3 & \$ 2,550 \
\hline
\end{array}$$ Assume that one unit is sold on March 23 for $1,125. Determine the gross profit for March and ending inventory on March 31 using a) FIFO and b) LIFO.

Accepted Answer

The answer of Three identical units of merchandise were purchased...

Question 7

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

Accepted Answer

The answer of On the basis of the following data,...

Question 8

Using a LIFO perpetual cost flow, calculate the value of the ending inventory and the cost of merchandise sold for the month of November of Beamer Company using the data below.   Calculate the following:
a) Inventory valuation at the end of November
b) Calculate the cost of merchandise sold for November

Accepted Answer

The answer of Using a LIFO perpetual cost flow, calculate...

Question 9

Match each description to the appropriate cost flow assumption a-c).
-Prohibited under International Financial Reporting Standards IFRS)

Accepted Answer

A) FIFO 
B) LIFO 
C) Weighted average 
A) FIFO 
B) LIFO 
C) Weighted average

Question 10

What is the amount of cost of merchandise sold for the year according to the FIFO method?

Accepted Answer

A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250 
A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250

Question 11

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:   Calculate the cost of the ending inventory at June 30, using a) the first-in, first-out FIFO) method and b) the last-in, first-out LIFO) method. Identify the quantity, unit price, and total cost of each lot in the inventory.

Accepted Answer

The answer of The following data regarding purchases and sales...

Question 12

A company will most likely use an estimated method of determining inventory when

Accepted Answer

A)  the company decides not to do a physical inventory 
B)  a natural disaster has destroyed most of the inventory 
C)  the company has not kept up with its inventory records 
D)  the company is preparing annual financial statements 
A)  the company decides not to do a physical inventory 
B)  a natural disaster has destroyed most of the inventory 
C)  the company has not kept up with its inventory records 
D)  the company is preparing annual financial statements

Question 13

One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

Accepted Answer

A) True 
 B)False

Question 14

Beginning inventory, purchases, and sales data for widgets are as follows:   Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using LIFO.

Accepted Answer

The answer of Beginning inventory, purchases, and sales data for...

Question 15

If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

Accepted Answer

A)  periodic 
B)  LIFO 
C)  FIFO 
D)  average cost 
A)  periodic 
B)  LIFO 
C)  FIFO 
D)  average cost

Question 16

The inventory costing method that reports the earliest costs in ending inventory is

Accepted Answer

A)  FIFO 
B)  LIFO 
C)  weighted average 
D)  specific identification 
A)  FIFO 
B)  LIFO 
C)  weighted average 
D)  specific identification

Question 17

In valuing merchandise for inventory purposes, net realizable value is the estimated selling price less any direct costs of disposal.

Accepted Answer

A) True 
 B)False

Question 18

Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category.   a) Complete the table.
b) Determine the amount of reduction in the inventory at April 30 attributable to market decline.

Accepted Answer

a) @#IMG-DLM& b) $22

Question 19

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Accepted Answer

A) True 
 B)False

Question 20

Cost flow is in the reverse order in which costs were incurred when using

Accepted Answer

A)  weighted average 
B)  last-in, first-out 
C)  first-in, first-out 
D)  average cost 
A)  weighted average 
B)  last-in, first-out 
C)  first-in, first-out 
D)  average cost

Exam 6: Inventories

What is the amount of the inventory at the end of the year using the FIFO method?

Unsold consigned merchandise should be included in the consignee's inventory.

A purchase order establishes an initial record of the receipt of the inventory.

Match each description to the appropriate cost flow assumption a-c). -Assigns the same value to all inventory units

Match each description to the appropriate cost flow assumption a-c). -Widely used for tax purposes

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

Match each description to the appropriate cost flow assumption a-c). -Prohibited under International Financial Reporting Standards IFRS)

What is the amount of cost of merchandise sold for the year according to the FIFO method?

A company will most likely use an estimated method of determining inventory when

One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

Beginning inventory, purchases, and sales data for widgets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using LIFO.

If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

The inventory costing method that reports the earliest costs in ending inventory is

In valuing merchandise for inventory purposes, net realizable value is the estimated selling price less any direct costs of disposal.

Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category. a) Complete the table. b) Determine the amount of reduction in the inventory at April 30 attributable to market decline.

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Cost flow is in the reverse order in which costs were incurred when using

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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