Question 1

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 answer choices 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 answer choices are correct.

Question 2

Alpha First Company just began business and made the following four inventory purchases in June:   A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

Accepted Answer

A)  $1,092 
B)  $1,131 
C)  $1,386 
D)  $1,368 
A)  $1,092 
B)  $1,131 
C)  $1,386 
D)  $1,368

Question 3

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $290 and used FIFO costing, the gross profit for the period would be

Accepted Answer

A)  $115. 
B)  $125. 
C)  $110. 
D)  $100. 
A)  $115. 
B)  $125. 
C)  $110. 
D)  $100.

Question 4

In a manufacturing company, goods that are ready to be sold to customers are referred to as ________________, whereas in a merchandising company they are generally referred to as _______________.

Accepted Answer

finished g

Question 5

The LIFO reserve is the difference between ending inventory using LIFO and ending inventory if FIFO were used instead.

Accepted Answer

A) True 
 B)False

Question 6

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

Accepted Answer

A)  detailed. 
B)  rules-based. 
C)  principles-based. 
D)  full of disclosure requirements. 
A)  detailed. 
B)  rules-based. 
C)  principles-based. 
D)  full of disclosure requirements.

Question 7

At May 1, 2014, Heineken Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows: 400 units at $7
600 units at $8
The company sold 1,000 units during the month for $12 per unit. Heineken uses the average cost method. The average cost per unit for May is

Accepted Answer

A)  $7.00. 
B)  $7.50. 
C)  $7.60. 
D)  $8.00. 
A)  $7.00. 
B)  $7.50. 
C)  $7.60. 
D)  $8.00.

Question 8

Pop-up Party Favors Inc has the following inventory data:   A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for July is

Accepted Answer

A)  $620. 
B)  $660. 
C)  $640. 
D)  $704. 
A)  $620. 
B)  $660. 
C)  $640. 
D)  $704.

Question 9

In periods of rising prices, which is an advantage of using the LIFO inventory costing method?

Accepted Answer

A)  Ending inventory will include latest (most recent) costs and thus be more realistic. 
B)  Cost of goods sold will include latest (most recent) costs and thus will be more realistic. 
C)  Net income will be the highest and thus reflect the prosperity of the company. 
D)  Phantom profits are reported. 
A)  Ending inventory will include latest (most recent) costs and thus be more realistic. 
B)  Cost of goods sold will include latest (most recent) costs and thus will be more realistic. 
C)  Net income will be the highest and thus reflect the prosperity of the company. 
D)  Phantom profits are reported.

Question 10

At December 31, 2014 Howell Company's inventory records indicated a balance of $858,000. Upon further investigation it was determined that this amount included the following: 
-$168,000 in inventory purchases made by Howell shipped from the seller 12/27/14 terms FOB destination, but not due to be received until January 2nd
-$111,000 in goods sold by Howell with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th.
-$9,000 of goods received on consignment from Westwood Company
What is Howell's correct ending inventory balance at December 31, 2014?

Accepted Answer

A)  $690,000 
B)  $849,000 
C)  $570,000 
D)  $681,000 
A)  $690,000 
B)  $849,000 
C)  $570,000 
D)  $681,000

Question 11

Use the following information regarding Black Company and Red Company to answer the question "Which amount is equal to Red Company's "days in inventory" for 2013 (to the closest decimal place)?"

Accepted Answer

A)  67.8 days 
B)  38.4 days 
C)  28.1 days 
D)  40.6 days 
A)  67.8 days 
B)  38.4 days 
C)  28.1 days 
D)  40.6 days

Question 12

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. If the company uses FIFO and sells the units for $10 each, what is the gross profit for the month?

Accepted Answer

A)  $1,188 
B)  $1,212 
C)  $2,400 
D)  $1,600 
A)  $1,188 
B)  $1,212 
C)  $2,400 
D)  $1,600

Question 13

The ______________ is calculated as cost of goods sold divided by average inventory.

Accepted Answer

The answer of The ______________ is calculated as cost of...

Question 14

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. If the company uses FIFO, what is the value of the ending inventory?

Accepted Answer

A)  $880 
B)  $800 
C)  $868 
D)  $1,212 
A)  $880 
B)  $800 
C)  $868 
D)  $1,212

Question 15

If a company has no beginning inventory and the unit price of inventory is increasing during a period, the cost of goods available for sale during the period will be the same under the LIFO and FIFO inventory methods.

Accepted Answer

A) True 
 B)False

Question 16

The ______________ method tracks the actual physical flow of each unit of inventory available for sale; however, management may be able to manipulate ______________ by using this method.

Accepted Answer

specific i

Question 17

To adjust a company's LIFO cost of goods sold to FIFO cost of goods sold

Accepted Answer

A)  the ending LIFO reserve is added to LIFO cost of goods sold. 
B)  the ending LIFO reserve is subtracted from LIFO cost of goods sold. 
C)  an increase in the LIFO reserve is subtracted from LIFO cost of goods sold. 
D)  a decrease in the LIFO reserve is subtracted from LIFO cost of goods sold. 
A)  the ending LIFO reserve is added to LIFO cost of goods sold. 
B)  the ending LIFO reserve is subtracted from LIFO cost of goods sold. 
C)  an increase in the LIFO reserve is subtracted from LIFO cost of goods sold. 
D)  a decrease in the LIFO reserve is subtracted from LIFO cost of goods sold.

Question 18

Serene Stereos 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 FIFO is

Accepted Answer

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

Question 19

Goods held on consignment are

Accepted Answer

A)  never owned by the consignee. 
B)  included in the consignee's ending inventory. 
C)  kept for sale on the premises of the consignor. 
D)  included as part of no one's ending inventory. 
A)  never owned by the consignee. 
B)  included in the consignee's ending inventory. 
C)  kept for sale on the premises of the consignor. 
D)  included as part of no one's ending inventory.

Question 20

Automobile Audio has the following inventory data:   A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under FIFO is

Accepted Answer

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

Inventories are defined by IFRS as

Alpha First Company just began business and made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $290 and used FIFO costing, the gross profit for the period would be

In a manufacturing company, goods that are ready to be sold to customers are referred to as __, whereas in a merchandising company they are generally referred to as _.

The LIFO reserve is the difference between ending inventory using LIFO and ending inventory if FIFO were used instead.

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

Pop-up Party Favors Inc has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for July is

In periods of rising prices, which is an advantage of using the LIFO inventory costing method?

Use the following information regarding Black Company and Red Company to answer the question "Which amount is equal to Red Company's "days in inventory" for 2013 (to the closest decimal place)?"

The ______________ is calculated as cost of goods sold divided by average inventory.

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. If the company uses FIFO, what is the value of the ending inventory?

If a company has no beginning inventory and the unit price of inventory is increasing during a period, the cost of goods available for sale during the period will be the same under the LIFO and FIFO inventory methods.

The method tracks the actual physical flow of each unit of inventory available for sale; however, management may be able to manipulate by using this method.

To adjust a company's LIFO cost of goods sold to FIFO cost of goods sold

Serene Stereos 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 FIFO is

Goods held on consignment are

Automobile Audio has the following inventory data: A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under FIFO is

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

Filters

Exam 6: Reporting and Analyzing Inventory

Inventories are defined by IFRS as

Alpha First Company just began business and made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $290 and used FIFO costing, the gross profit for the period would be

In a manufacturing company, goods that are ready to be sold to customers are referred to as ________________, whereas in a merchandising company they are generally referred to as _______________.

The LIFO reserve is the difference between ending inventory using LIFO and ending inventory if FIFO were used instead.

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

Pop-up Party Favors Inc has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for July is

In periods of rising prices, which is an advantage of using the LIFO inventory costing method?

Use the following information regarding Black Company and Red Company to answer the question "Which amount is equal to Red Company's "days in inventory" for 2013 (to the closest decimal place)?"

The ______________ is calculated as cost of goods sold divided by average inventory.

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. If the company uses FIFO, what is the value of the ending inventory?

If a company has no beginning inventory and the unit price of inventory is increasing during a period, the cost of goods available for sale during the period will be the same under the LIFO and FIFO inventory methods.

The ______________ method tracks the actual physical flow of each unit of inventory available for sale; however, management may be able to manipulate ______________ by using this method.

To adjust a company's LIFO cost of goods sold to FIFO cost of goods sold

Serene Stereos 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 FIFO is

Goods held on consignment are

Automobile Audio has the following inventory data: A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under FIFO is

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

Filters

In a manufacturing company, goods that are ready to be sold to customers are referred to as __, whereas in a merchandising company they are generally referred to as _.

The method tracks the actual physical flow of each unit of inventory available for sale; however, management may be able to manipulate by using this method.