Question 1

When goods are sold FOB shipping point, ownership of the inventory is passed when the

Accepted Answer

A)  inventory arrives at the destination 
B)  purchase order for the inventory is complete 
C)  inventory is shipped to the buyer 
D)  inventory sold is segregated from the seller's other inventory 
A)  inventory arrives at the destination 
B)  purchase order for the inventory is complete 
C)  inventory is shipped to the buyer 
D)  inventory sold is segregated from the seller's other inventory

Question 2

Revolution Hardware reported $475,000 of inventory on December 31, 2016, based on a physical count.
Additional information is as follows:
Included in the 2016 physical count were machines billed to a customer FOB shipping point
? on December 31. These machines had a cost of $12,000 and had been billed at $30,000. The shipment was on Revolution's loading dock waiting to be picked up by the carrier.
? Goods were in transit from a vendor to Revolution. The invoice cost was $85,000 and the goods were shipped FOB shipping point on December 29, 2016.
? Work in process inventory not included in the physical count) costing $7,850 was sent to an outside processor for finishing on December 30, 2016.
? Goods out on consignment amounted to $26,500 sales price) with shipping costs of $590 not included in sales price). Markup is 15% on cost.
Required:
Compute the correct amount of December 31, 2016, ending inventory for Revolution Hardware.

Accepted Answer

$475,000 +

Question 3

Typically, the impact of the LIFO reserve is to

Accepted Answer

A)  increase cost of goods sold and decrease ending inventory 
B)  decrease cost of goods sold and decrease ending inventory 
C)  increase cost of goods sold and increase ending inventory 
D)  have no effect on cost of goods sold and ending inventory 
A)  increase cost of goods sold and decrease ending inventory 
B)  decrease cost of goods sold and decrease ending inventory 
C)  increase cost of goods sold and increase ending inventory 
D)  have no effect on cost of goods sold and ending inventory

Question 4

The following data has been provided by Lee Company regarding its inventory purchases and sales throughout the year.  
 Compute the cost of goods sold and ending inventory using the perpetual inventory system for the LIFO cost flow assumption.

Accepted Answer

Ending inventory is

Question 5

The costs of operating a purchasing department are necessary to the purchasing of inventory therefore; those costs should be allocated to inventory.

Accepted Answer

A) True 
 B)False

Question 6

The use of dollar-value LIFO follows the same methodology as the LIFO method but reduces the record keeping.

Accepted Answer

A) True 
 B)False

Question 7

Cabinets for Less uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2016, the following information was obtained from the inventory records:

Accepted Answer

The answer of Cabinets for Less uses FIFO for internal...

Question 8

Left Images Printing uses perpetual LIFO in valuing its inventory. The March 1 inventory was 36 units at $6 each. Purchases and sales during March were as follows:   The cost of the ending inventory was

Accepted Answer

A)  $424 
B)  $312 
C)  $330 
D)  $286 
A)  $424 
B)  $312 
C)  $330 
D)  $286

Question 9

The cost of goods sold model for a manufacturer is:

Accepted Answer

A) True 
 B)False

Question 10

Martins Game Stop began the current quarter with the following inventory: 900 units @ $10 per unit and 250 units @
$12 per unit. During the quarter, Martin purchased 400 units @ $13 per unit and sold 680 units. Martin prepares interim financial statements each quarter.
Required:
a. Determine the amount of LIFO liquidation profit for the quarter.
b. Assume the liquidation is not to be reflected in the current quarter's financial statements. Prepare the necessary adjusting entry.
c. Explain the circumstances when an inventory liquidation is not reported on interim financial statements.

Accepted Answer

The answer of Martins Game Stop began the current quarter...

Question 11

Exhibit 7-2
Edwards Co. purchased raw materials with a cost of $95,000 on March 2, 2015. Credit terms of 3/20, n/60 applied.
-Refer to Exhibit 7-2. If Edwards uses the net method and pays for the purchase on March 18, 2015, what amount is recorded in the Purchase Discounts Taken account?

Accepted Answer

A)  $0 
B)  $2,850 
C)  $5,000 
D)  $3,000 
A)  $0 
B)  $2,850 
C)  $5,000 
D)  $3,000

Question 12

The Purchases Discounts Taken account may appear in the accounting records if which one of the following methods is used to account for purchase discounts?

Accepted Answer

A)  net price method 
B)  gross price method 
C)  allowance method 
D)  sales price method 
A)  net price method 
B)  gross price method 
C)  allowance method 
D)  sales price method

Question 13

Dollar-value LIFO uses

Accepted Answer

A)  current cost only 
B)  cost indexes only 
C)  current cost and cost indexes 
D)  numerous detailed records from either a physical count or perpetual records 
A)  current cost only 
B)  cost indexes only 
C)  current cost and cost indexes 
D)  numerous detailed records from either a physical count or perpetual records

Question 14

The following relationship is only true for a merchandising firm:
Beginning Inventory
+ Purchases net)
or Production costs
for the period
= Cost of Goods
Available for Sale

Accepted Answer

A) True 
 B)False

When goods are sold FOB shipping point, ownership of the inventory is passed when the

Typically, the impact of the LIFO reserve is to

The following data has been provided by Lee Company regarding its inventory purchases and sales throughout the year. Compute the cost of goods sold and ending inventory using the perpetual inventory system for the LIFO cost flow assumption.

The costs of operating a purchasing department are necessary to the purchasing of inventory therefore; those costs should be allocated to inventory.

The use of dollar-value LIFO follows the same methodology as the LIFO method but reduces the record keeping.

Cabinets for Less uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2016, the following information was obtained from the inventory records:

Left Images Printing uses perpetual LIFO in valuing its inventory. The March 1 inventory was 36 units at $6 each. Purchases and sales during March were as follows: The cost of the ending inventory was

The cost of goods sold model for a manufacturer is:

Exhibit 7-2 Edwards Co. purchased raw materials with a cost of $95,000 on March 2, 2015. Credit terms of 3/20, n/60 applied. -Refer to Exhibit 7-2. If Edwards uses the net method and pays for the purchase on March 18, 2015, what amount is recorded in the Purchase Discounts Taken account?

The Purchases Discounts Taken account may appear in the accounting records if which one of the following methods is used to account for purchase discounts?

Dollar-value LIFO uses

The following relationship is only true for a merchandising firm: Beginning Inventory + Purchases net) or Production costs for the period = Cost of Goods Available for Sale

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Company S Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows Time Value of Money Module

Cash and Receivables

Inventories: Special Valuation Issues

Current Liabilities and Contingent Obligations

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Long-Term Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Post-Retirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Understanding Time Value of Money Formulas and Concepts

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Exam 7: Inventories: Cost Measurement and Flow Assumptions

When goods are sold FOB shipping point, ownership of the inventory is passed when the

Typically, the impact of the LIFO reserve is to

The following data has been provided by Lee Company regarding its inventory purchases and sales throughout the year. Compute the cost of goods sold and ending inventory using the perpetual inventory system for the LIFO cost flow assumption.

The costs of operating a purchasing department are necessary to the purchasing of inventory therefore; those costs should be allocated to inventory.

The use of dollar-value LIFO follows the same methodology as the LIFO method but reduces the record keeping.

Cabinets for Less uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2016, the following information was obtained from the inventory records:

Left Images Printing uses perpetual LIFO in valuing its inventory. The March 1 inventory was 36 units at $6 each. Purchases and sales during March were as follows: The cost of the ending inventory was

The cost of goods sold model for a manufacturer is:

Exhibit 7-2 Edwards Co. purchased raw materials with a cost of $95,000 on March 2, 2015. Credit terms of 3/20, n/60 applied. -Refer to Exhibit 7-2. If Edwards uses the net method and pays for the purchase on March 18, 2015, what amount is recorded in the Purchase Discounts Taken account?

The Purchases Discounts Taken account may appear in the accounting records if which one of the following methods is used to account for purchase discounts?

Dollar-value LIFO uses

The following relationship is only true for a merchandising firm: Beginning Inventory + Purchases net) or Production costs for the period = Cost of Goods Available for Sale

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Company S Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows Time Value of Money Module

Cash and Receivables

Inventories: Special Valuation Issues

Current Liabilities and Contingent Obligations

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Long-Term Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Post-Retirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Understanding Time Value of Money Formulas and Concepts

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