Question 1

Inventory accounting under IFRS differs from GAAP in regard to

Accepted Answer

A) neither the use of LIFO nor lower-of-cost-or-market. 
B) the use of LIFO but not lower-of-cost-or-market. 
C) the use of lower-of-cost-or-market but not LIFO. 
D) the use of LIFO and lower-of-cost-or-market. 
A) neither the use of LIFO nor lower-of-cost-or-market. 
B) the use of LIFO but not lower-of-cost-or-market. 
C) the use of lower-of-cost-or-market but not LIFO. 
D) the use of LIFO and lower-of-cost-or-market.

Question 2

Romanoff Industries had the following inventory transactions occur during 2015:   The company sold 150 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

Accepted Answer

A) $3,318 
B) $3,552 
C) $6,948 
D) $7,182 
A) $3,318 
B) $3,552 
C) $6,948 
D) $7,182

Question 3

138. Pappy's Staff has the following inventory information.   Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis?

Accepted Answer

A) $5,848 
B) $5,860 
C) $6,068 
D) $6,346 
A) $5,848 
B) $5,860 
C) $6,068 
D) $6,346

Question 4

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

Accepted Answer

A) True 
 B)False

Question 5

Eneri Company's inventory records show the following data:   A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. The weighted-average cost per unit is

Accepted Answer

A) $8.00. 
B) $8.01. 
C) $8.24. 
D) $9.30. 
A) $8.00. 
B) $8.01. 
C) $8.24. 
D) $9.30.

Question 6

In a perpetual inventory system, the cost of goods sold under the FIFO method is based on the cost of the latest goods on hand during the period.

Accepted Answer

A) True 
 B)False

Question 7

A company may use more than one inventory costing method concurrently.

Accepted Answer

A) True 
 B)False

Question 8

If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.

Accepted Answer

A) True 
 B)False

Question 9

The gross profit method is based on the assumption that the rate of gross profit remains constant from one year to the next.

Accepted Answer

A) True 
 B)False

Question 10

Inventories are defined by IFRS as

Accepted Answer

A) held-for-sale in the ordinary course of business. 
B) in the process of production for sale in the ordinary course of business. 
C) in the form of materials or supplies to be consumed in the production process or in the providing of services. 
D) All of these answers are correct. 
A) held-for-sale in the ordinary course of business. 
B) in the process of production for sale in the ordinary course of business. 
C) in the form of materials or supplies to be consumed in the production process or in the providing of services. 
D) All of these answers are correct.

Question 11

The following information is available for Everett Company at December 31, 2015: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $1,050,000; and sales $1,800,000. Everett's inventory turnover in 2015 is

Accepted Answer

A) 8.7 times. 
B) 10.5 times. 
C) 13.2 times. 
D) 18 times. 
A) 8.7 times. 
B) 10.5 times. 
C) 13.2 times. 
D) 18 times.

Question 12

Under the lower-of-cost-or-market basis, market is defined as current replacement cost.

Accepted Answer

A) True 
 B)False

Question 13

Manufacturers usually classify inventory into all the following general categories except

Accepted Answer

A) work in process 
B) finished goods 
C) merchandise inventory 
D) raw materials 
A) work in process 
B) finished goods 
C) merchandise inventory 
D) raw materials

Question 14

Disclosures about inventory should include each of the following except the

Accepted Answer

A) basis of accounting. 
B) costing method. 
C) quantity of inventory. 
D) major inventory classifications. 
A) basis of accounting. 
B) costing method. 
C) quantity of inventory. 
D) major inventory classifications.

Question 15

Priscilla has the following inventory information.   A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using the average-cost method, the value of ending inventory is

Accepted Answer

A) $680. 
B) $704. 
C) $723. 
D) $730. 
A) $680. 
B) $704. 
C) $723. 
D) $730.

Question 16

Which of the following statements is correct with respect to inventories?

Accepted Answer

A) The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold. 
B) It is generally good business management to sell the most recently acquired goods first. 
C) Under FIFO, the ending inventory is based on the latest units purchased. 
D) FIFO seldom coincides with the actual physical flow of inventory. 
A) The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold. 
B) It is generally good business management to sell the most recently acquired goods first. 
C) Under FIFO, the ending inventory is based on the latest units purchased. 
D) FIFO seldom coincides with the actual physical flow of inventory.

Question 17

A company just starting business made the following four inventory purchases in June:   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

Accepted Answer

A) $683. 
B) $825. 
C) $1,290. 
D) $1,432. 
A) $683. 
B) $825. 
C) $1,290. 
D) $1,432.

Question 18

In periods of inflation, phantom or paper profits may be reported as a result of using the

Accepted Answer

A) perpetual inventory method. 
B) FIFO costing assumption. 
C) LIFO costing assumption. 
D) periodic inventory method. 
A) perpetual inventory method. 
B) FIFO costing assumption. 
C) LIFO costing assumption. 
D) periodic inventory method.

Question 19

Of the following companies, which one would not likely employ the specific identification method for inventory costing?

Accepted Answer

A) Music store specializing in organ sales 
B) Farm implement dealership 
C) Antique shop 
D) Hardware store 
A) Music store specializing in organ sales 
B) Farm implement dealership 
C) Antique shop 
D) Hardware store

Question 20

A problem with the specific identification method is that

Accepted Answer

A) inventories can be reported at actual costs. 
B) management can manipulate income. 
C) matching is not achieved. 
D) the lower-of-cost-or-market basis cannot be applied. 
A) inventories can be reported at actual costs. 
B) management can manipulate income. 
C) matching is not achieved. 
D) the lower-of-cost-or-market basis cannot be applied.

Inventory accounting under IFRS differs from GAAP in regard to

Romanoff Industries had the following inventory transactions occur during 2015: The company sold 150 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

138. Pappy's Staff has the following inventory information. Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis?

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

Eneri Company's inventory records show the following data: A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. The weighted-average cost per unit is

In a perpetual inventory system, the cost of goods sold under the FIFO method is based on the cost of the latest goods on hand during the period.

A company may use more than one inventory costing method concurrently.

If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.

The gross profit method is based on the assumption that the rate of gross profit remains constant from one year to the next.

Inventories are defined by IFRS as

The following information is available for Everett Company at December 31, 2015: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $1,050,000; and sales $1,800,000. Everett's inventory turnover in 2015 is

Under the lower-of-cost-or-market basis, market is defined as current replacement cost.

Manufacturers usually classify inventory into all the following general categories except

Disclosures about inventory should include each of the following except the

Priscilla has the following inventory information. A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using the average-cost method, the value of ending inventory is

Which of the following statements is correct with respect to inventories?

A company just starting business made the following four inventory purchases in June: 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

In periods of inflation, phantom or paper profits may be reported as a result of using the

Of the following companies, which one would not likely employ the specific identification method for inventory costing?

A problem with the specific identification method is that

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, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

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Exam 6: Inventories

Inventory accounting under IFRS differs from GAAP in regard to

Romanoff Industries had the following inventory transactions occur during 2015: The company sold 150 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

138. Pappy's Staff has the following inventory information. Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis?

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

Eneri Company's inventory records show the following data: A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. The weighted-average cost per unit is

In a perpetual inventory system, the cost of goods sold under the FIFO method is based on the cost of the latest goods on hand during the period.

A company may use more than one inventory costing method concurrently.

If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.

The gross profit method is based on the assumption that the rate of gross profit remains constant from one year to the next.

Inventories are defined by IFRS as

The following information is available for Everett Company at December 31, 2015: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $1,050,000; and sales $1,800,000. Everett's inventory turnover in 2015 is

Under the lower-of-cost-or-market basis, market is defined as current replacement cost.

Manufacturers usually classify inventory into all the following general categories except

Disclosures about inventory should include each of the following except the

Priscilla has the following inventory information. A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using the average-cost method, the value of ending inventory is

Which of the following statements is correct with respect to inventories?

A company just starting business made the following four inventory purchases in June: 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

In periods of inflation, phantom or paper profits may be reported as a result of using the

Of the following companies, which one would not likely employ the specific identification method for inventory costing?

A problem with the specific identification method is that

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, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters