Question 1

Redeker Company had the following records:   What is Redeker's inventory turnover for 2013? (rounded)

Accepted Answer

A)  5.6 times 
B)  5.5 times 
C)  0.2 times 
D)  5.3 times 
A)  5.6 times 
B)  5.5 times 
C)  0.2 times 
D)  5.3 times

Question 2

An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is

Accepted Answer

The answer of An error in the physical count of...

Question 3

Raw materials inventories are the goods that a manufacturing company has completed and are ready to be sold to customers.

Accepted Answer

A) True 
 B)False

Question 4

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 5

A major criticism of the FIFO inventory method is that it magnifies the effects of the business cycle on business income.

Accepted Answer

A) True 
 B)False

Question 6

Jenks Company developed the following information about its inventories in applying the lower of cost or market (LCM) basis in valuing inventories:   If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be

Accepted Answer

A)  $177,000. 
B)  $179,000. 
C)  $175,000. 
D)  $181,000. 
A)  $177,000. 
B)  $179,000. 
C)  $175,000. 
D)  $181,000.

Question 7

A low number of days in inventory may indicate all of the following except

Accepted Answer

A)  Sales opportunities may be lost because of inventory shortages. 
B)  There is less chance of having obsolete inventory items. 
C)  The company has fewer funds tied up in inventory. 
D)  Management has achieved the best balance between too much and too little inventory levels. 
A)  Sales opportunities may be lost because of inventory shortages. 
B)  There is less chance of having obsolete inventory items. 
C)  The company has fewer funds tied up in inventory. 
D)  Management has achieved the best balance between too much and too little inventory levels.

Question 8

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

Accepted Answer

A) True 
 B)False

Question 9

Torrey Company uses the periodic inventory system to account for inventories. Information related to Torrey Company's inventory at October 31 is given below:   Instructions
1. Show computations to value the ending inventory using the FIFO cost assumption if 500 units remain on hand at October 31.
2. Show computations to value the ending inventory using the weighted-average cost method if 500 units remain on hand at October 31.
3. Show computations to value the ending inventory using the LIFO cost assumption if 500 units remain on hand at October 31.

Accepted Answer

1. 500 units in ending inventory.
Under

Question 10

The specific identification method of costing inventories is used when the

Accepted Answer

A)  physical flow of units cannot be determined. 
B)  company sells large quantities of relatively low cost homogeneous items. 
C)  company sells large quantities of relatively low cost heterogeneous items. 
D)  company sells a limited quantity of high-unit cost items. 
A)  physical flow of units cannot be determined. 
B)  company sells large quantities of relatively low cost homogeneous items. 
C)  company sells large quantities of relatively low cost heterogeneous items. 
D)  company sells a limited quantity of high-unit cost items.

Question 11

Orange-Aide Company has the following inventory data:   A physical count of merchandise inventory on July 30 reveals that there are 25 units on hand. Using the average cost method, the value of ending inventory is

Accepted Answer

A)  $535 
B)  $523 c $525
D $550 
A)  $535 
B)  $523 c $525
D $550

Question 12

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Black Company's "cost of goods sold" for 2013 (to the closest dollar)?"

Accepted Answer

A)  $300,830 
B)  $281,838 
C)  $319,823 
D)  $320,946 
A)  $300,830 
B)  $281,838 
C)  $319,823 
D)  $320,946

Question 13

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 14

What is the primary basis of accounting for inventories? What is the major objective in accounting for inventories?

Accepted Answer

The primary basis of accounting for inve

Question 15

An aircraft company would most likely have a

Accepted Answer

A)  high inventory turnover. 
B)  low profit margin. 
C)  high volume. 
D)  low inventory turnover. 
A)  high inventory turnover. 
B)  low profit margin. 
C)  high volume. 
D)  low inventory turnover.

Question 16

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "What is Danforth's LIFO reserve for 2013?"

Accepted Answer

A)  $535 
B)  $85 
C)  $42 
D)  $58 
A)  $535 
B)  $85 
C)  $42 
D)  $58

Question 17

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 18

In periods of falling prices, FIFO will result in a larger net income than the LIFO method.

Accepted Answer

A) True 
 B)False

Question 19

Clear Clarinets has the following inventory data:   Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a FIFO basis.

Accepted Answer

A)  $10,932 
B)  $11,022 
C)  $23,088. 
D)  $23,118 
A)  $10,932 
B)  $11,022 
C)  $23,088. 
D)  $23,118

Question 20

Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?

Accepted Answer

A)  Goods in transit to Reeves, FOB destination 
B)  Goods that Reeves is holding on consignment for Parker Company 
C)  Goods in transit that Reeves has sold to Smith Company, FOB shipping point 
D)  Goods that Reeves is holding in inventory on March 31 for which the related Accounts Payable is 15 days past due 
A)  Goods in transit to Reeves, FOB destination 
B)  Goods that Reeves is holding on consignment for Parker Company 
C)  Goods in transit that Reeves has sold to Smith Company, FOB shipping point 
D)  Goods that Reeves is holding in inventory on March 31 for which the related Accounts Payable is 15 days past due

Redeker Company had the following records: What is Redeker's inventory turnover for 2013? (rounded)

An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is

Raw materials inventories are the goods that a manufacturing company has completed and are ready to be sold to customers.

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

A major criticism of the FIFO inventory method is that it magnifies the effects of the business cycle on business income.

Jenks Company developed the following information about its inventories in applying the lower of cost or market (LCM) basis in valuing inventories: If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be

A low number of days in inventory may indicate all of the following except

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

The specific identification method of costing inventories is used when the

Orange-Aide Company has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 25 units on hand. Using the average cost method, the value of ending inventory is

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Black Company's "cost of goods sold" for 2013 (to the closest dollar)?"

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

What is the primary basis of accounting for inventories? What is the major objective in accounting for inventories?

An aircraft company would most likely have a

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "What is Danforth's LIFO reserve for 2013?"

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

In periods of falling prices, FIFO will result in a larger net income than the LIFO method.

Clear Clarinets has the following inventory data: Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a FIFO basis.

Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?

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

Redeker Company had the following records: What is Redeker's inventory turnover for 2013? (rounded)

An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is

Raw materials inventories are the goods that a manufacturing company has completed and are ready to be sold to customers.

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

A major criticism of the FIFO inventory method is that it magnifies the effects of the business cycle on business income.

Jenks Company developed the following information about its inventories in applying the lower of cost or market (LCM) basis in valuing inventories: If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be

A low number of days in inventory may indicate all of the following except

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

The specific identification method of costing inventories is used when the

Orange-Aide Company has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 25 units on hand. Using the average cost method, the value of ending inventory is

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Black Company's "cost of goods sold" for 2013 (to the closest dollar)?"

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

What is the primary basis of accounting for inventories? What is the major objective in accounting for inventories?

An aircraft company would most likely have a

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "What is Danforth's LIFO reserve for 2013?"

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

In periods of falling prices, FIFO will result in a larger net income than the LIFO method.

Clear Clarinets has the following inventory data: Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a FIFO basis.

Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?

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