Exam 6: Inventories

138. Pappy's Staff has the following inventory information. July 1 Beginning Inventory 20 units at \ 90 5 Purchases 120 units at \ 92 14 Sale 80 units 21 Purchases 60 units at \ 95 30 Sale 56 units Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis?

The managers of Constantine Company receive performance bonuses based on the net income of the firm. Which inventory costing method are they likely to favor in periods of declining prices?

The more inventory a company has in stock, the greater the company's profit.

The first-in, first-out (FIFO) inventory method results in an ending inventory valued at the most recent cost.

Cost of goods sold is computed from the following equation:

The cost of goods available for sale is allocated between

Transactions that affect inventories on hand have an effect on both the balance sheet and the income statement.

At May 1, 2015, 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. The average cost per unit for May is

The convergence issue that will be most difficult to resolve in the area of inventory accounting is:

In a period of falling prices, the LIFO method results in a lower cost of goods sold than the FIFO method.

Pappy's Staff Junkets has the following inventory information. July 1 Beginning Inventory 20 units at \ 90 5 Purchases 120 units at \ 92 14 Sale 80 units 21 Purchases 60 units at \ 95 30 Sale 56 units Assuming that a perpetual inventory system is used, what is the ending inventory on a LIFO basis?

A company just starting business made the following four inventory purchases in June: June 1 150 units \ 390 June 10 200 units 585 June 15 200 units 630 June 28 150 units 510 \2 ,115 A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is

The LIFO inventory method assumes that the cost of the latest units purchased are

The lower-of-cost-or-market basis of valuing inventories is an example of

The factor which determines whether or not goods should be included in a physical count of inventory is

The cost flow method that often parallels the actual physical flow of merchandise is the

GAAP's provision for ownership of goods (goods-in-transit or consigned goods), as well as which costs to include in inventory, as compared to IFRS are: Ownership of goods $\quad$$\quad$ Costs to include in inventory a. essentially similar $\quad$$\quad$ essentially similar b. essentially different $\quad$$\quad$ essentially different c. essentially similar $\quad$$\quad$ essentially different d. essentially different $\quad$$\quad$ essentially similar

Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2015 are as follows: Units Per unit price Total Balance, 1/1/15 200 \ 5.00 \ 1,000 Purchase, 1/15/15 100 5.30 530 Purchase, 1/28/15 100 5.50 550 An end of the month (1/31/15) inventory showed that 160 units were on hand. If the company uses FIFO and sells the units for $10 each, what is the gross profit for the month?

The option to value inventory at fair value exists under GAAP IFRS a. Yes No b. Yes Yes c. No No d. No Yes

A problem with the specific identification method is that