Question 1

GAAP defines market for lower-of-cost-or market essentially as

Accepted Answer

A)  net realizable value. 
B)  estimated selling price in the ordinary course of business. 
C)  replacement cost. 
D)  replacement cost less costs of disposal. 
A)  net realizable value. 
B)  estimated selling price in the ordinary course of business. 
C)  replacement cost. 
D)  replacement cost less costs of disposal.

Question 2

An error that overstates the ending inventory will also cause net income for the period to be overstated.

Accepted Answer

A) True 
 B)False

Question 3

The major IFRS requirements related to accounting for and reporting inventories are

Accepted Answer

A)  the same as GAAP. 
B)  the same as GAAP with a couple of exceptions. 
C)  completely different fom GAAP. 
D)  not comparable to GAAP. 
A)  the same as GAAP. 
B)  the same as GAAP with a couple of exceptions. 
C)  completely different fom GAAP. 
D)  not comparable to GAAP.

Question 4

The term "FOB" denotes

Accepted Answer

A)  free on board. 
B)  freight on board. 
C)  free only (to) buyer. 
D)  freight charge on buyer. 
A)  free on board. 
B)  freight on board. 
C)  free only (to) buyer. 
D)  freight charge on buyer.

Question 5

Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2014 are as follows:   An end of the month (1/31/2014) inventory showed that 160 units were on hand. How many units did the company sell during January 2014?

Accepted Answer

A)  60 
B)  160 
C)  200 
D)  240 
A)  60 
B)  160 
C)  200 
D)  240

Question 6

Hess Company's inventory records show the following data for the month of September:   A physical inventory on September 30 shows 150 units on hand.
Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Accepted Answer

Ending inventory: (100 units ×

Question 7

Wooderson Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Wooderson Company uses the periodic inventory system.   Instructions
(a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. (Show computations)
(b) Using the weighted-average method, calculate the amount assigned to the inventory on hand on March 31. (Show computations)
(c) Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31. (Show computations)

Accepted Answer

@#IMG-DLM& (a) Using FIFO - the earliest units pur

Question 8

Classic Floors has the following inventory data:   Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?

Accepted Answer

A)  $465.60 
B)  $236.40 
C)  $702.00 
D)  $348.00 
A)  $465.60 
B)  $236.40 
C)  $702.00 
D)  $348.00

Question 9

Under the periodic inventory system, both the sales amount and the cost of goods sold amount are recorded when each item of merchandise is sold.

Accepted Answer

A) True 
 B)False

Question 10

Hogan Industries had the following inventory transactions occur during 2014:   The company sold 102 units at $63 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)  $4,882 
B)  $4,730 
C)  $1,696 
D)  $1,544 
A)  $4,882 
B)  $4,730 
C)  $1,696 
D)  $1,544

Question 11

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO adjustment, which company shows the greatest improvement in its current ratio from 2013 to 2014?"

Accepted Answer

A)  Boxter 
B)  Clifford 
C)  Danforth 
D)  Evans 
A)  Boxter 
B)  Clifford 
C)  Danforth 
D)  Evans

Question 12

A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000; the ending inventory for this period is correct. The amounts reflected in the current end of the period balance sheet are

Accepted Answer

The answer of A company uses the periodic inventory method...

Question 13

The situation that requires a departure from the cost basis of accounting to the lower of cost or market basis in valuing inventory is necessitated by

Accepted Answer

A)  a decline in the value of the inventory. 
B)  an increase in selling price. 
C)  an increase in the value of the inventory. 
D)  a desire for more profit. 
A)  a decline in the value of the inventory. 
B)  an increase in selling price. 
C)  an increase in the value of the inventory. 
D)  a desire for more profit.

Question 14

Reporting which one of the following allows analysts to make adjustments to compare companies using different cost flow methods?

Accepted Answer

A)  FIFO reserve 
B)  Inventory turnover 
C)  LIFO reserve 
D)  Current replacement cost 
A)  FIFO reserve 
B)  Inventory turnover 
C)  LIFO reserve 
D)  Current replacement cost

Question 15

Carryable CDs has the following inventory data:   A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Cost of goods sold under LIFO is

Accepted Answer

A)  $438 
B)  $846 
C)  $421 
D)  $863 
A)  $438 
B)  $846 
C)  $421 
D)  $863

Question 16

Woodson Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Woodson Company uses the perpetual inventory system.   Instructions
(a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. (Show computations)
(b) Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31. (Show computations)

Accepted Answer

@#IMG-DLM& (a) Using FIFO - the earliest units pur

Question 17

Snug-As-A-Bug Blankets has the following inventory data:   Assuming that a perpetual inventory system is used, what is the ending inventory on a LIFO basis for July?

Accepted Answer

A)  $2,748 
B)  $2,754 
C)  $2,772. 
D)  $5,796 
A)  $2,748 
B)  $2,754 
C)  $2,772. 
D)  $5,796

Question 18

If beginning inventory is understated by $10,000, the effect of this error in the current period is

Accepted Answer

The answer of If beginning inventory is understated by $10,000,...

Question 19

Redeker Company had the following records:   What is Redeker's average days in inventory for 2014? (rounded)

Accepted Answer

A)  67.6 days 
B)  66.4 days 
C)  68.9 days 
D)  68.25 days 
A)  67.6 days 
B)  66.4 days 
C)  68.9 days 
D)  68.25 days

Question 20

In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory?

Accepted Answer

A)  Average cost method 
B)  LIFO method 
C)  FIFO method 
D)  Need more information to answer 
A)  Average cost method 
B)  LIFO method 
C)  FIFO method 
D)  Need more information to answer

GAAP defines market for lower-of-cost-or market essentially as

An error that overstates the ending inventory will also cause net income for the period to be overstated.

The major IFRS requirements related to accounting for and reporting inventories are

The term "FOB" denotes

Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2014 are as follows: An end of the month (1/31/2014) inventory showed that 160 units were on hand. How many units did the company sell during January 2014?

Hess Company's inventory records show the following data for the month of September: A physical inventory on September 30 shows 150 units on hand. Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Classic Floors has the following inventory data: Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?

Under the periodic inventory system, both the sales amount and the cost of goods sold amount are recorded when each item of merchandise is sold.

Hogan Industries had the following inventory transactions occur during 2014: The company sold 102 units at $63 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)

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO adjustment, which company shows the greatest improvement in its current ratio from 2013 to 2014?"

A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000; the ending inventory for this period is correct. The amounts reflected in the current end of the period balance sheet are

The situation that requires a departure from the cost basis of accounting to the lower of cost or market basis in valuing inventory is necessitated by

Reporting which one of the following allows analysts to make adjustments to compare companies using different cost flow methods?

Carryable CDs has the following inventory data: A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Cost of goods sold under LIFO is

Snug-As-A-Bug Blankets has the following inventory data: Assuming that a perpetual inventory system is used, what is the ending inventory on a LIFO basis for July?

If beginning inventory is understated by $10,000, the effect of this error in the current period is

Redeker Company had the following records: What is Redeker's average days in inventory for 2014? (rounded)

In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

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Exam 6: Reporting and Analyzing Inventory

GAAP defines market for lower-of-cost-or market essentially as

An error that overstates the ending inventory will also cause net income for the period to be overstated.

The major IFRS requirements related to accounting for and reporting inventories are

The term "FOB" denotes

Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2014 are as follows: An end of the month (1/31/2014) inventory showed that 160 units were on hand. How many units did the company sell during January 2014?

Hess Company's inventory records show the following data for the month of September: A physical inventory on September 30 shows 150 units on hand. Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Classic Floors has the following inventory data: Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?

Under the periodic inventory system, both the sales amount and the cost of goods sold amount are recorded when each item of merchandise is sold.

Hogan Industries had the following inventory transactions occur during 2014: The company sold 102 units at $63 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)

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO adjustment, which company shows the greatest improvement in its current ratio from 2013 to 2014?"

A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000; the ending inventory for this period is correct. The amounts reflected in the current end of the period balance sheet are

The situation that requires a departure from the cost basis of accounting to the lower of cost or market basis in valuing inventory is necessitated by

Reporting which one of the following allows analysts to make adjustments to compare companies using different cost flow methods?

Carryable CDs has the following inventory data: A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Cost of goods sold under LIFO is

Snug-As-A-Bug Blankets has the following inventory data: Assuming that a perpetual inventory system is used, what is the ending inventory on a LIFO basis for July?

If beginning inventory is understated by $10,000, the effect of this error in the current period is

Redeker Company had the following records: What is Redeker's average days in inventory for 2014? (rounded)

In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

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