Exam 7: Reporting and Interpreting Inventories and Cost of Goods Sold

A company purchased $6,000 of merchandise. Transportation costs were an additional $100. The company later returned $250 of the merchandise and paid the invoice within the 2% discount period. What is the total amount of cash paid?

Acme sells 150 units during this quarter. If Acme uses the weighted average method, what is its cost of goods sold for the quarter?

Which of the following would be in the finished goods inventory of a company making cheese?

During 2010, Shockglass Company recorded inventory purchases of $45,000 and cost of goods sold of $50,000. If inventory at the beginning of the year was $15,000, the ending inventory balance must have been:

If the company uses the weighted average inventory costing method, what is the cost of its ending inventory?

An understatement of the ending inventory balance will cause:

The inventory turnover ratio is calculated as:

A retailer using a periodic inventory system returned $3,000 of defective merchandise which was purchased on account from one of its wholesale suppliers. The entry to record this transaction on the retailer's books would include a debit to

The Acme Corporation buys 300 units of merchandise in January at $5 each. Acme buys 500 units at $4 each in February and 200 units at $6 each in March. Acme sells 150 units during this quarter. Acme uses a periodic inventory system and had no beginning inventory. What is its cost of goods sold for the quarter using the LIFO method?

What is the inventory turnover ratio (rounded to one decimal place)?

The 2011 records of Thompson Company showed beginning inventory, $6,000; cost of goods sold, $14,000; and ending inventory, $8,000. The cost of purchases for 2006 was:

A company should always keep extra inventory on hand; it could be needed if demand increases and it has to be bought sooner or later so it adds nothing to cost.

A company's ability to pay its short-term obligations depends on many factors including how quickly it sells its inventory.

Inventory levels increase by 10% at your company during the fourth quarter. Based on this increase, which of the following statements is true?

An understatement of the beginning inventory balance causes:

If BetterBuy uses the specific identification method, its cost of goods sold will be:

One of the most common sources of misstatement in financial statements is the:

Your company had a beginning inventory of $109,500 and purchased $240,720 during the accounting period. Assuming no returns, find the goods available for sale, the cost of goods sold, the inventory turnover ratio, and days to sell for the company if its ending inventory was $94,820.

Which of the following is the equation for cost of goods sold?

A company using a perpetual inventory system made the following entry: What does this entry reflect?