Question 1

Specific Identification must be used for inventory valuation where the inventory items are not interchangeable under

Accepted Answer

The answer of Specific Identification must be used for inventory...

Question 2

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 3

Manufactured inventory that has begun the production process but is not yet completed is

Accepted Answer

A)  work in process. 
B)  raw materials. 
C)  merchandise inventory. 
D)  finished goods. 
A)  work in process. 
B)  raw materials. 
C)  merchandise inventory. 
D)  finished goods.

Question 4

Quiet Phones Company has the following inventory data:   A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is

Accepted Answer

A)  $620. 
B)  $660. 
C)  $1,340. 
D)  $1,380. 
A)  $620. 
B)  $660. 
C)  $1,340. 
D)  $1,380.

Question 5

The factor which determines whether or not goods should be included in a physical count of inventory is

Accepted Answer

A)  physical possession. 
B)  legal title. 
C)  management's judgment. 
D)  whether or not the purchase price has been paid. 
A)  physical possession. 
B)  legal title. 
C)  management's judgment. 
D)  whether or not the purchase price has been paid.

Question 6

At December 31, 2014 Mohling Company's inventory records indicated a balance of $602,000. Upon further investigation it was determined that this amount included the following: $\bullet$$112,000 in inventory purchases made by Mohling shipped from the seller 12/27/14 terms FOB destination, but not due to be received until January 2nd
$\bullet$$74,000 in goods sold by Mohling with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th.
$\bullet$$6,000 of goods received on consignment from Dollywood Company
What is Mohling's correct ending inventory balance at December 31, 2014?

Accepted Answer

A)  $490,000 
B)  $596,000 
C)  $410,000 
D)  $484,000 
A)  $490,000 
B)  $596,000 
C)  $410,000 
D)  $484,000

Question 7

After the physical inventory is completed,

Accepted Answer

A)  quantities are listed on inventory summary sheets. 
B)  quantities are entered into various general ledger inventory accounts. 
C)  the accuracy of the inventory summary sheets is checked by the person listing the quantities on the sheets. 
D)  unit costs are determined by dividing the quantities on the summary sheets by the total inventory costs. 
A)  quantities are listed on inventory summary sheets. 
B)  quantities are entered into various general ledger inventory accounts. 
C)  the accuracy of the inventory summary sheets is checked by the person listing the quantities on the sheets. 
D)  unit costs are determined by dividing the quantities on the summary sheets by the total inventory costs.

Question 8

Which statement concerning lower of cost or market (LCM) is incorrect?

Accepted Answer

A)  LCM is an example of a company choosing the accounting method that will be least likely to overstate assets and income. 
B)  Under the LCM basis, market does not apply because assets are always recorded and maintained at cost. 
C)  The LCM basis uses current replacement cost because a decline in this cost usually leads to a decline in the selling price of the inventory item. 
D)  LCM is applied after one of the cost flow assumptions has been applied. 
A)  LCM is an example of a company choosing the accounting method that will be least likely to overstate assets and income. 
B)  Under the LCM basis, market does not apply because assets are always recorded and maintained at cost. 
C)  The LCM basis uses current replacement cost because a decline in this cost usually leads to a decline in the selling price of the inventory item. 
D)  LCM is applied after one of the cost flow assumptions has been applied.

Question 9

Under a periodic inventory system, the merchandise on hand at the end of the period is determined by a physical count of the inventory.

Accepted Answer

A) True 
 B)False

Question 10

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO reserve adjustment, which company would has the strongest liquidity position for 2014 as expressed by the current ratio?"

Accepted Answer

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

Question 11

The LIFO reserve is

Accepted Answer

A)  the difference between the value of the inventory under LIFO and the value under FIFO. 
B)  an amount used to adjust inventory to the lower of cost or market. 
C)  the difference between the value of the inventory under LIFO and the value under average cost. 
D)  the amount used to adjust inventory to history cost. 
A)  the difference between the value of the inventory under LIFO and the value under FIFO. 
B)  an amount used to adjust inventory to the lower of cost or market. 
C)  the difference between the value of the inventory under LIFO and the value under average cost. 
D)  the amount used to adjust inventory to history cost.

Question 12

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 13

Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace wants the most realistic cost of goods sold. Which inventory costing method should Ace consider using?

Accepted Answer

A)  Average because all inventory costs will then represent an average amount. 
B)  Specific identification is the most realistic method because it involves the actual costs. 
C)  LIFO because cost of goods sold represents the latest costs. 
D)  FIFO because cost of goods sold represents the earliest costs. 
A)  Average because all inventory costs will then represent an average amount. 
B)  Specific identification is the most realistic method because it involves the actual costs. 
C)  LIFO because cost of goods sold represents the latest costs. 
D)  FIFO because cost of goods sold represents the earliest costs.

Question 14

Specific Identification can be used for inventory valuation under

Accepted Answer

The answer of Specific Identification can be used for inventory...

Question 15

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 16

The requirement that companies use the same cost flow assumption of all goods of a similar nature is found in

Accepted Answer

The answer of The requirement that companies use the same...

Question 17

Compute the cost to be assigned to ending inventory for each of the methods indicated given the following information about purchases and sales during the year.

Accepted Answer

$935 [($3,300/600) x

Question 18

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 19

When the average cost method is applied in a perpetual inventory system, the sale of goods will change the unit cost that remains in inventory.

Accepted Answer

A) True 
 B)False

Question 20

Consigned goods are held for sale by one party although ownership of the goods is retained by another party.

Accepted Answer

A) True 
 B)False

Specific Identification must be used for inventory valuation where the inventory items are not interchangeable under

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.

Manufactured inventory that has begun the production process but is not yet completed is

Quiet Phones Company has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is

The factor which determines whether or not goods should be included in a physical count of inventory is

After the physical inventory is completed,

Which statement concerning lower of cost or market (LCM) is incorrect?

Under a periodic inventory system, the merchandise on hand at the end of the period is determined by a physical count of the inventory.

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO reserve adjustment, which company would has the strongest liquidity position for 2014 as expressed by the current ratio?"

The LIFO reserve is

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

Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace wants the most realistic cost of goods sold. Which inventory costing method should Ace consider using?

Specific Identification can be used for inventory valuation under

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

The requirement that companies use the same cost flow assumption of all goods of a similar nature is found in

Compute the cost to be assigned to ending inventory for each of the methods indicated given the following information about purchases and sales during the year.

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

When the average cost method is applied in a perpetual inventory system, the sale of goods will change the unit cost that remains in inventory.

Consigned goods are held for sale by one party although ownership of the goods is retained by another party.

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

Exam 6: Reporting and Analyzing Inventory

Specific Identification must be used for inventory valuation where the inventory items are not interchangeable under

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.

Manufactured inventory that has begun the production process but is not yet completed is

Quiet Phones Company has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is

The factor which determines whether or not goods should be included in a physical count of inventory is

After the physical inventory is completed,

Which statement concerning lower of cost or market (LCM) is incorrect?

Under a periodic inventory system, the merchandise on hand at the end of the period is determined by a physical count of the inventory.

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO reserve adjustment, which company would has the strongest liquidity position for 2014 as expressed by the current ratio?"

The LIFO reserve is

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

Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace wants the most realistic cost of goods sold. Which inventory costing method should Ace consider using?

Specific Identification can be used for inventory valuation under

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

The requirement that companies use the same cost flow assumption of all goods of a similar nature is found in

Compute the cost to be assigned to ending inventory for each of the methods indicated given the following information about purchases and sales during the year.

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

When the average cost method is applied in a perpetual inventory system, the sale of goods will change the unit cost that remains in inventory.

Consigned goods are held for sale by one party although ownership of the goods is retained by another party.

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