Question 1

The lower of cost or market basis of valuing inventories is an example of

Accepted Answer

A)  comparability. 
B)  the historical cost principle. 
C)  conservatism. 
D)  consistency. 
A)  comparability. 
B)  the historical cost principle. 
C)  conservatism. 
D)  consistency. C

Question 2

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. B

Question 3

LIFO can be used

Accepted Answer

A)  under neither GAAP nor IFRS. 
B)  under IFRS but not GAAP. 
C)  under GAAP but not IFRS. 
D)  under both GAAP and IFRS. 
A)  under neither GAAP nor IFRS. 
B)  under IFRS but not GAAP. 
C)  under GAAP but not IFRS. 
D)  under both GAAP and IFRS. C

Question 4

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 5

For each of the independent events listed below, analyze the impact on the indicated items at the end of the current year by placing the appropriate code letter in the box under each item.

Accepted Answer

Question 6

Which of the following terms best describes the assumption made in applying the four inventory methods?

Accepted Answer

A)  Goods flow 
B)  Cost flow 
C)  Asset flow 
D)  Physical flow 
A)  Goods flow 
B)  Cost flow 
C)  Asset flow 
D)  Physical flow

Question 7

Arnold Pharmacy reported cost of goods sold as follows:   Arnold made two errors:
(1) 2013 ending inventory was overstated by $6,000.
(2) 2014 ending inventory was understated by $11,000.
Instructions
Assuming the errors had not been corrected, indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U).

Accepted Answer

The answer of Arnold Pharmacy reported cost of goods sold...

Question 8

The specific identification method of inventory costing

Accepted Answer

A)  always maximizes a company's net income. 
B)  always minimizes a company's net income. 
C)  has no effect on a company's net income. 
D)  may enable management to manipulate net income. 
A)  always maximizes a company's net income. 
B)  always minimizes a company's net income. 
C)  has no effect on a company's net income. 
D)  may enable management to manipulate net income.

Question 9

The following information was available for Camara Company at December 31, 2014: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $560,000; and sales $800,000. Camara's days in inventory in 2014 was

Accepted Answer

A)  45.6 days. 
B)  54.5 days. 
C)  65.2 days. 
D)  77.7 days. 
A)  45.6 days. 
B)  54.5 days. 
C)  65.2 days. 
D)  77.7 days.

Question 10

The Entertainment Center accumulates the following cost and market data at December 31.   What is the lower-of-cost-or-market value of the inventory?

Accepted Answer

The answer of The Entertainment Center accumulates the following cost...

Question 11

This information is available for Groneman, Inc. for 2013 and 2014.   Instructions
Calculate the inventory turnover, days in inventory, and gross profit rate for Groneman., Inc. for 2013 and 2014. Comment on any trends.

Accepted Answer

@#IMG-DLM& The inventory turnover decreased by app

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, 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 13

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 14

The selection of an appropriate inventory cost flow assumption for an individual company is made by

Accepted Answer

A)  the external auditors. 
B)  the SEC. 
C)  the internal auditors. 
D)  management. 
A)  the external auditors. 
B)  the SEC. 
C)  the internal auditors. 
D)  management.

Question 15

Butler Company reported ending inventory at December 31, 2014 of $1,200,000 under LIFO. It also reported a LIFO reserve of $210,000 at January 1, 2014, and $300,000 at December 31, 2014. Cost of goods sold for 2014 was $4,600,000. If Butler Company had used FIFO during 2014, its cost of goods sold for 2014 would have been

Accepted Answer

A)  $4,900,000. 
B)  $4,690,000. 
C)  $4,510,000. 
D)  $4,300,000. 
A)  $4,900,000. 
B)  $4,690,000. 
C)  $4,510,000. 
D)  $4,300,000.

Question 16

All of the following statements are true regarding the LIFO reserve except:

Accepted Answer

A)  Companies using LIFO are required to report the LIFO reserve. 
B)  The equation (LIFO inventory - LIFO reserve = FIFO inventory) adjusts the inventory balance from LIFO to FIFO. 
C)  The financial statement differences of using LIFO normally increase the longer a company uses LIFO. 
D)  Current ratios and the inventory turnover can be significantly affected if a company has material LIFO reserves. 
A)  Companies using LIFO are required to report the LIFO reserve. 
B)  The equation (LIFO inventory - LIFO reserve = FIFO inventory) adjusts the inventory balance from LIFO to FIFO. 
C)  The financial statement differences of using LIFO normally increase the longer a company uses LIFO. 
D)  Current ratios and the inventory turnover can be significantly affected if a company has material LIFO reserves.

Question 17

The FIFO reserve is a required disclosure for companies that use FIFO.

Accepted Answer

A) True 
 B)False

Question 18

An inventory turnover that is too high may indicate that the company is losing sales opportunities because of inventory shortages.

Accepted Answer

A) True 
 B)False

Question 19

At December 31, 2014, the following information (in thousands) was available for Kitselman Inc.: ending inventory $22,600; beginning inventory $21,400; cost of goods sold $198,000; and sales revenue $430,000. Calculate the inventory turnover and days in inventory for Kitselman.

Accepted Answer

The answer of At December 31, 2014, the following information...

Question 20

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

The lower of cost or market basis of valuing inventories is an example of

LIFO can be used

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?

For each of the independent events listed below, analyze the impact on the indicated items at the end of the current year by placing the appropriate code letter in the box under each item.

Which of the following terms best describes the assumption made in applying the four inventory methods?

The specific identification method of inventory costing

The following information was available for Camara Company at December 31, 2014: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $560,000; and sales $800,000. Camara's days in inventory in 2014 was

The Entertainment Center accumulates the following cost and market data at December 31. What is the lower-of-cost-or-market value of the inventory?

This information is available for Groneman, Inc. for 2013 and 2014. Instructions Calculate the inventory turnover, days in inventory, and gross profit rate for Groneman., Inc. for 2013 and 2014. Comment on any trends.

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?

Inventories are defined by IFRS as

The selection of an appropriate inventory cost flow assumption for an individual company is made by

All of the following statements are true regarding the LIFO reserve except:

The FIFO reserve is a required disclosure for companies that use FIFO.

An inventory turnover that is too high may indicate that the company is losing sales opportunities because of inventory shortages.

At December 31, 2014, the following information (in thousands) was available for Kitselman Inc.: ending inventory $22,600; beginning inventory $21,400; cost of goods sold $198,000; and sales revenue $430,000. Calculate the inventory turnover and days in inventory for Kitselman.

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?

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

Time Value of Money

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Exam 6: Reporting and Analyzing Inventory

The lower of cost or market basis of valuing inventories is an example of

LIFO can be used

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?

For each of the independent events listed below, analyze the impact on the indicated items at the end of the current year by placing the appropriate code letter in the box under each item.

Which of the following terms best describes the assumption made in applying the four inventory methods?

The specific identification method of inventory costing

The following information was available for Camara Company at December 31, 2014: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $560,000; and sales $800,000. Camara's days in inventory in 2014 was

The Entertainment Center accumulates the following cost and market data at December 31. What is the lower-of-cost-or-market value of the inventory?

This information is available for Groneman, Inc. for 2013 and 2014. Instructions Calculate the inventory turnover, days in inventory, and gross profit rate for Groneman., Inc. for 2013 and 2014. Comment on any trends.

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?

Inventories are defined by IFRS as

The selection of an appropriate inventory cost flow assumption for an individual company is made by

All of the following statements are true regarding the LIFO reserve except:

The FIFO reserve is a required disclosure for companies that use FIFO.

An inventory turnover that is too high may indicate that the company is losing sales opportunities because of inventory shortages.

At December 31, 2014, the following information (in thousands) was available for Kitselman Inc.: ending inventory $22,600; beginning inventory $21,400; cost of goods sold $198,000; and sales revenue $430,000. Calculate the inventory turnover and days in inventory for Kitselman.

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?

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

Time Value of Money

Filters