Question 1

The following information applied to Mark, Inc.for 2010:   Mark's 2010 inventoriable cost was

Accepted Answer

A) $211,000. 
B) $206,000. 
C) $203,000. 
D) $200,000. 
A) $211,000. 
B) $206,000. 
C) $203,000. 
D) $200,000.

Question 2

Assume that no correcting entries were made at December 31, 2010.Ignoring income taxes, by how much will retained earnings at December 31, 2011 be overstated or understated?

Accepted Answer

A) $2,000 understated 
B) $6,000 overstated 
C) $6,000 understated 
D) $9,000 understated 
A) $2,000 understated 
B) $6,000 overstated 
C) $6,000 understated 
D) $9,000 understated

Question 3

Under variable costing, fixed manufacturing overhead costs are

Accepted Answer

A) product costs. 
B) period costs. 
C) charged to work in process and finished goods. 
D) part of cost of goods sold. 
A) product costs. 
B) period costs. 
C) charged to work in process and finished goods. 
D) part of cost of goods sold.

Question 4

The following information is available for Kobold Company for 2010:   The cost of goods sold is equal to 400% of selling expenses.What is the cost of goods available for sale?

Accepted Answer

A) $420,000. 
B) $390,000. 
C) $750,000. 
D) $720,000. 
A) $420,000. 
B) $390,000. 
C) $750,000. 
D) $720,000.

Question 5

Other things being equal, income calculated by the variable costing method will exceed that calculated by the absorption method if

Accepted Answer

A) units produced exceed units sold. 
B) units sold exceed units produced. 
C) fixed manufacturing costs increase. 
D) variable manufacturing costs increase. 
A) units produced exceed units sold. 
B) units sold exceed units produced. 
C) fixed manufacturing costs increase. 
D) variable manufacturing costs increase.

Question 6

Use the following information for questions 
Toby Co.uses the retail inventory method.The following information is available for the current year.
  
-If the ending inventory is to be valued at approximately lower of average cost and market, the calculation of the cost ratio should be based on cost and retail of

Accepted Answer

A) $450,000 and $645,000. 
B) $450,000 and $642,000. 
C) $559,000 and $825,000. 
D) $567,000 and $828,000. 
A) $450,000 and $645,000. 
B) $450,000 and $642,000. 
C) $559,000 and $825,000. 
D) $567,000 and $828,000.

Question 7

Which of the following is least likely an example of a special sales agreement?

Accepted Answer

A) A sale with a buyback agreement 
B) A sale with delayed payment terms 
C) A cash sale where title to the goods passes as the cash is received. 
D) A sale with a high rate of return 
A) A sale with a buyback agreement 
B) A sale with delayed payment terms 
C) A cash sale where title to the goods passes as the cash is received. 
D) A sale with a high rate of return

Question 8

Eskins Co.received merchandise on consignment.As of January 31, Eskins included the goods in inventory, but did not record the transaction.The effect of this on its financial statements for January 31 would be

Accepted Answer

A) net income, current assets, and retained earnings were overstated. 
B) net income was correct and current assets were understated. 
C) net income and current assets were overstated and current liabilities were understated. 
D) net income, current assets, and retained earnings were understated. 
A) net income, current assets, and retained earnings were overstated. 
B) net income was correct and current assets were understated. 
C) net income and current assets were overstated and current liabilities were understated. 
D) net income, current assets, and retained earnings were understated.

Question 9

The gross profit method of inventory valuation is invalid when

Accepted Answer

A) a portion of the inventory is destroyed. 
B) there is a substantial increase in inventory during the year. 
C) there is no beginning inventory because it is the first year of operation. 
D) none of these. 
A) a portion of the inventory is destroyed. 
B) there is a substantial increase in inventory during the year. 
C) there is no beginning inventory because it is the first year of operation. 
D) none of these.

Question 10

Which of the following does not correctly describe the specific identification costing method?

Accepted Answer

A) This method is most appropriate when goods are not interchangeable 
B) This method is most appropriate when goods are interchangeable 
C) This method is generally used for expensive, one-of-a-kind merchandise 
D) None of these 
A) This method is most appropriate when goods are not interchangeable 
B) This method is most appropriate when goods are interchangeable 
C) This method is generally used for expensive, one-of-a-kind merchandise 
D) None of these

Question 11

Greer Company's accounting records indicated the following information:   A physical inventory taken on December 31, 2010, resulted in an ending inventory of $700,000.Greer's gross profit on sales has remained constant at 30% in recent years.Greer suspects some inventory may have been taken by a new employee.At December
31, 2010, what is the estimated cost of missing inventory?

Accepted Answer

A) $100,000. 
B) $150,000. 
C) $200,000. 
D) $800,000. 
A) $100,000. 
B) $150,000. 
C) $200,000. 
D) $800,000.

Question 12

Use the following information for questions 
  
-Peak's 2010 entry to record to adjust its inventory from cost to the lower of cost and net realizable value (NRV) is

Accepted Answer

A) Debit: "Loss-NRV" and credit: "Allowance-NRV" $50,000 
B) Debit: "Allowance-NRV" and credit: "Loss-NRV" $50,000 
C) Debit: "Loss-NRV" and credit: "Inventory" $50,000 
D) Debit: "Inventory" and credit: "Loss-NRV" $50,000 
A) Debit: "Loss-NRV" and credit: "Allowance-NRV" $50,000 
B) Debit: "Allowance-NRV" and credit: "Loss-NRV" $50,000 
C) Debit: "Loss-NRV" and credit: "Inventory" $50,000 
D) Debit: "Inventory" and credit: "Loss-NRV" $50,000

Question 13

Use the following information for questions 
Toby Co.uses the retail inventory method.The following information is available for the current year.
  
-The approximate cost of the ending inventory by the conventional retail method is

Accepted Answer

A) $143,850. 
B) $142,380. 
C) $147,000. 
D) $153,720. 
A) $143,850. 
B) $142,380. 
C) $147,000. 
D) $153,720.

Question 14

A manufacturing company typically has the following inventory accounts:

Accepted Answer

A) Accounts Receivable, purchases and freight-in. 
B) Beginning inventory and ending inventory 
C) Raw materials, work in process and finished goods. 
D) None of these 
A) Accounts Receivable, purchases and freight-in. 
B) Beginning inventory and ending inventory 
C) Raw materials, work in process and finished goods. 
D) None of these

Question 15

Which of the following formulas is used to determine a company's inventory turnover?

Accepted Answer

A) Cost of goods sold / Average inventory 
B) Average inventory / Cost of goods sold 
C) Cost of goods sold x Average inventory 
D) Average assets / Cost of goods sold 
A) Cost of goods sold / Average inventory 
B) Average inventory / Cost of goods sold 
C) Cost of goods sold x Average inventory 
D) Average assets / Cost of goods sold

Question 16

Assume that the proper correcting entries were made at December 31, 2010.By how much will 2011 income before taxes be overstated or understated?

Accepted Answer

A) $2,000 understated 
B) $2,000 overstated 
C) $4,000 overstated 
D) $6,000 overstated 
A) $2,000 understated 
B) $2,000 overstated 
C) $4,000 overstated 
D) $6,000 overstated

Question 17

Walter Distribution Co.has determined its December 31, 2010 inventory on a FIFO basis at $240,000.Information pertaining to that inventory follows:   Walter records losses that result from applying the lower of cost and market rule.At December 31, 2010, the loss that Walter should recognize is

Accepted Answer

A) $0. 
B) $5,000. 
C) $15,000. 
D) $25,000. 
A) $0. 
B) $5,000. 
C) $15,000. 
D) $25,000.

Question 18

Use the following information for questions 
  
-Assuming that Lock maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar?

Accepted Answer

A) $10,505. 
B) $10,237. 
C) $10,260. 
D) $10,360. 
A) $10,505. 
B) $10,237. 
C) $10,260. 
D) $10,360.

Question 19

Oxley Retailers purchased merchandise with a list price of $30,000, subject to trade discounts of 20 percent and 10 percent, with no cash discounts allowable.Oxley should record the cost of this merchandise as

Accepted Answer

A) $30,000. 
B) $23,400. 
C) $21,600. 
D) $21,000. 
A) $30,000. 
B) $23,400. 
C) $21,600. 
D) $21,000.

Question 20

The gross profit percentage is calculated by

Accepted Answer

A) dividing cost of goods sold by net sales. 
B) dividing gross profit on sales by cost of goods sold. 
C) dividing gross profit on sales by net sales. 
D) dividing gross profit on sales by goods available for sale. 
A) dividing cost of goods sold by net sales. 
B) dividing gross profit on sales by cost of goods sold. 
C) dividing gross profit on sales by net sales. 
D) dividing gross profit on sales by goods available for sale.

The following information applied to Mark, Inc.for 2010: Mark's 2010 inventoriable cost was

Assume that no correcting entries were made at December 31, 2010.Ignoring income taxes, by how much will retained earnings at December 31, 2011 be overstated or understated?

Under variable costing, fixed manufacturing overhead costs are

The following information is available for Kobold Company for 2010: The cost of goods sold is equal to 400% of selling expenses.What is the cost of goods available for sale?

Other things being equal, income calculated by the variable costing method will exceed that calculated by the absorption method if

Which of the following is least likely an example of a special sales agreement?

Eskins Co.received merchandise on consignment.As of January 31, Eskins included the goods in inventory, but did not record the transaction.The effect of this on its financial statements for January 31 would be

The gross profit method of inventory valuation is invalid when

Which of the following does not correctly describe the specific identification costing method?

Use the following information for questions -Peak's 2010 entry to record to adjust its inventory from cost to the lower of cost and net realizable value (NRV) is

Use the following information for questions Toby Co.uses the retail inventory method.The following information is available for the current year. -The approximate cost of the ending inventory by the conventional retail method is

A manufacturing company typically has the following inventory accounts:

Which of the following formulas is used to determine a company's inventory turnover?

Assume that the proper correcting entries were made at December 31, 2010.By how much will 2011 income before taxes be overstated or understated?

Walter Distribution Co.has determined its December 31, 2010 inventory on a FIFO basis at $240,000.Information pertaining to that inventory follows: Walter records losses that result from applying the lower of cost and market rule.At December 31, 2010, the loss that Walter should recognize is

Use the following information for questions -Assuming that Lock maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar?

Oxley Retailers purchased merchandise with a list price of $30,000, subject to trade discounts of 20 percent and 10 percent, with no cash discounts allowable.Oxley should record the cost of this merchandise as

The gross profit percentage is calculated by

The Canadian Financial Reporting Environment

Conceptual Framework Underlying Financial Reporting

The Accounting Information System

Reporting Financial Performance

Financial Position and Cash Flows

Revenue Recognition

Cash and Receivables

Investments

Property, Plant, and Equipment: Accounting Model Basics

Depreciation, Impairment, and Disposition

Intangible Assets and Goodwill

Filters

Exam 8: Inventory

The following information applied to Mark, Inc.for 2010: Mark's 2010 inventoriable cost was

Assume that no correcting entries were made at December 31, 2010.Ignoring income taxes, by how much will retained earnings at December 31, 2011 be overstated or understated?

Under variable costing, fixed manufacturing overhead costs are

The following information is available for Kobold Company for 2010: The cost of goods sold is equal to 400% of selling expenses.What is the cost of goods available for sale?

Other things being equal, income calculated by the variable costing method will exceed that calculated by the absorption method if

Which of the following is least likely an example of a special sales agreement?

Eskins Co.received merchandise on consignment.As of January 31, Eskins included the goods in inventory, but did not record the transaction.The effect of this on its financial statements for January 31 would be

The gross profit method of inventory valuation is invalid when

Which of the following does not correctly describe the specific identification costing method?

Use the following information for questions -Peak's 2010 entry to record to adjust its inventory from cost to the lower of cost and net realizable value (NRV) is

Use the following information for questions Toby Co.uses the retail inventory method.The following information is available for the current year. -The approximate cost of the ending inventory by the conventional retail method is

A manufacturing company typically has the following inventory accounts:

Which of the following formulas is used to determine a company's inventory turnover?

Assume that the proper correcting entries were made at December 31, 2010.By how much will 2011 income before taxes be overstated or understated?

Walter Distribution Co.has determined its December 31, 2010 inventory on a FIFO basis at $240,000.Information pertaining to that inventory follows: Walter records losses that result from applying the lower of cost and market rule.At December 31, 2010, the loss that Walter should recognize is

Use the following information for questions -Assuming that Lock maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar?

Oxley Retailers purchased merchandise with a list price of $30,000, subject to trade discounts of 20 percent and 10 percent, with no cash discounts allowable.Oxley should record the cost of this merchandise as

The gross profit percentage is calculated by

The Canadian Financial Reporting Environment

Conceptual Framework Underlying Financial Reporting

The Accounting Information System

Reporting Financial Performance

Financial Position and Cash Flows

Revenue Recognition

Cash and Receivables

Investments

Property, Plant, and Equipment: Accounting Model Basics

Depreciation, Impairment, and Disposition

Intangible Assets and Goodwill

Filters