Question 1

Which of the following would most likely use a periodic inventory system?

Accepted Answer

A)  car dealership 
B)  heavy metal distributor 
C)  computer dealership 
D)  local handcrafted furniture store 
A)  car dealership 
B)  heavy metal distributor 
C)  computer dealership 
D)  local handcrafted furniture store

Question 2

Foamy Suds Ltd. had a fire at its warehouse and was trying to determine the cost of the inventory lost. For the year to date, sales had been $525,000, opening inventory was $125,000, purchases to date were $318,000, and the cost-to-sales ratio is normally 60%. Inventory not damaged in the fire was $18,000. What was the cost of the inventory damaged in the fire?

Accepted Answer

A)  $110,000 
B)  $124,000 
C)  $160,000 
D)  $74,000 
A)  $110,000 
B)  $124,000 
C)  $160,000 
D)  $74,000

Question 3

Which of the following cost formulas would be most appropriate when the inventory units are unique or costly?

Accepted Answer

A)  FIFO 
B)  specific identification 
C)  just-in-time 
D)  weighted-average 
A)  FIFO 
B)  specific identification 
C)  just-in-time 
D)  weighted-average

Question 4

For each of the independent events listed below, analyze the impact on the indicated items at the end of the current calendar year by placing the appropriate code under the correct heading.

Accepted Answer

The answer of For each of the independent events listed...

Question 5

A car dealership specializing in luxury vehicles most likely uses a perpetual inventory system for inventory management.
Instructions
Why would the perpetual system be important for the manager of the car dealership?

Accepted Answer

A perpetual system provides more up-to-d

Question 6

Use the following information to answer questions 70-71.
Pal Distributers Inc. values its inventory on an LCM basis. The following data came from the 2020 inventory, which consisted of two items:  
-The appropriate carrying value for the entire inventory when applying the LCM rule using net realizable value to the inventory as a whole would be

Accepted Answer

A)  $25,000. 
B)  $26,000. 
C)  $27,000. 
D)  $28,000. 
A)  $25,000. 
B)  $26,000. 
C)  $27,000. 
D)  $28,000.

Question 7

Tamarack Co. prepares its estimate of LCM using the net realizable value. Inventory item 101 cost $45 and its current replacement cost is $50. The item is currently selling in the market for $55 and selling costs are estimated to be $6. Tamarack expects to earn a profit of $4 on the sale of this item. In its year-end financial statements, Tamarack Co. should value this item at

Accepted Answer

A)  $50. 
B)  $45. 
C)  $49. 
D)  $55. 
A)  $50. 
B)  $45. 
C)  $49. 
D)  $55.

Question 8

FOB means "For only Buyers".

Accepted Answer

A) True 
 B)False

Question 9

Blythe Inc. uses a perpetual inventory system and had the following activity for a single inventory item:   Instructions
Using the perpetual system, determine the ending inventory and cost of goods sold under: 
a) FIFO
b) Weighted-average (round unit cost to nearest cent)

Accepted Answer

@#IMG-DLM& b) Weight

Question 10

The gross margin ratio is equal to gross margin divided by sales revenue.

Accepted Answer

A) True 
 B)False

Question 11

When we calculate weighted-average using the periodic system, we recalculate a new weighted-average cost per unit after every sale.

Accepted Answer

A) True 
 B)False

Question 12

A major consideration for a company when selecting a supplier is

Accepted Answer

A)  supplier location 
B)  online presence 
C)  company profitability 
D)  inventory valuation 
A)  supplier location 
B)  online presence 
C)  company profitability 
D)  inventory valuation

Question 13

If a company's inventory turnover ratio is 6.6, it takes them on average 55 days to sell their inventory.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following should be included in the cost of inventory?

Accepted Answer

A)  the cost of keeping the inventory records 
B)  depreciation on the inventory warehouse 
C)  the salesperson's commission 
D)  receiving and inspection costs 
A)  the cost of keeping the inventory records 
B)  depreciation on the inventory warehouse 
C)  the salesperson's commission 
D)  receiving and inspection costs

Question 15

FOB shipping means the seller owns the inventory until it reaches the buyers premise.

Accepted Answer

A) True 
 B)False

Question 16

Use of the FIFO cost formula means that

Accepted Answer

A)  the perpetual costing system is used. 
B)  the ending inventory contains the oldest costs. 
C)  the periodic costing system is used. 
D)  the ending inventory contains the most recent costs. 
A)  the perpetual costing system is used. 
B)  the ending inventory contains the oldest costs. 
C)  the periodic costing system is used. 
D)  the ending inventory contains the most recent costs.

Question 17

Which term describes a situation where the buyer is responsible for paying shipping and other costs incurred while goods are in transit from the seller's premise to the buyer's premises.

Accepted Answer

A)  FOB shipping 
B)  FOB destination 
C)  FOB purchasing 
D)  FOB receiving 
A)  FOB shipping 
B)  FOB destination 
C)  FOB purchasing 
D)  FOB receiving

Question 18

The following amounts are always known under which inventory costing system?

Accepted Answer

The answer of The following amounts are always known under...

Question 19

COGS is equal to the inventory purchased for a given time period.

Accepted Answer

A) True 
 B)False

Question 20

In order to ensure that the inventory values presented on the statement of financial position at year end reflect the true economic benefits of the inventory, the company may need to

Accepted Answer

A)  have an inventory fire sale. 
B)  use a perpetual inventory system. 
C)  use a JIT system. 
D)  prepare an inventory writedown. 
A)  have an inventory fire sale. 
B)  use a perpetual inventory system. 
C)  use a JIT system. 
D)  prepare an inventory writedown.

Which of the following would most likely use a periodic inventory system?

Which of the following cost formulas would be most appropriate when the inventory units are unique or costly?

For each of the independent events listed below, analyze the impact on the indicated items at the end of the current calendar year by placing the appropriate code under the correct heading.

A car dealership specializing in luxury vehicles most likely uses a perpetual inventory system for inventory management. Instructions Why would the perpetual system be important for the manager of the car dealership?

FOB means "For only Buyers".

Blythe Inc. uses a perpetual inventory system and had the following activity for a single inventory item: Instructions Using the perpetual system, determine the ending inventory and cost of goods sold under: a) FIFO b) Weighted-average (round unit cost to nearest cent)

The gross margin ratio is equal to gross margin divided by sales revenue.

When we calculate weighted-average using the periodic system, we recalculate a new weighted-average cost per unit after every sale.

A major consideration for a company when selecting a supplier is

If a company's inventory turnover ratio is 6.6, it takes them on average 55 days to sell their inventory.

Which of the following should be included in the cost of inventory?

FOB shipping means the seller owns the inventory until it reaches the buyers premise.

Use of the FIFO cost formula means that

Which term describes a situation where the buyer is responsible for paying shipping and other costs incurred while goods are in transit from the seller's premise to the buyer's premises.

The following amounts are always known under which inventory costing system?

COGS is equal to the inventory purchased for a given time period.

In order to ensure that the inventory values presented on the statement of financial position at year end reflect the true economic benefits of the inventory, the company may need to

Overview of Corporate Financial Reporting

Analyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

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Exam 7: Inventory

Which of the following would most likely use a periodic inventory system?

Which of the following cost formulas would be most appropriate when the inventory units are unique or costly?

For each of the independent events listed below, analyze the impact on the indicated items at the end of the current calendar year by placing the appropriate code under the correct heading.

A car dealership specializing in luxury vehicles most likely uses a perpetual inventory system for inventory management. Instructions Why would the perpetual system be important for the manager of the car dealership?

FOB means "For only Buyers".

Blythe Inc. uses a perpetual inventory system and had the following activity for a single inventory item: Instructions Using the perpetual system, determine the ending inventory and cost of goods sold under: a) FIFO b) Weighted-average (round unit cost to nearest cent)

The gross margin ratio is equal to gross margin divided by sales revenue.

When we calculate weighted-average using the periodic system, we recalculate a new weighted-average cost per unit after every sale.

A major consideration for a company when selecting a supplier is

If a company's inventory turnover ratio is 6.6, it takes them on average 55 days to sell their inventory.

Which of the following should be included in the cost of inventory?

FOB shipping means the seller owns the inventory until it reaches the buyers premise.

Use of the FIFO cost formula means that

Which term describes a situation where the buyer is responsible for paying shipping and other costs incurred while goods are in transit from the seller's premise to the buyer's premises.

The following amounts are always known under which inventory costing system?

COGS is equal to the inventory purchased for a given time period.

In order to ensure that the inventory values presented on the statement of financial position at year end reflect the true economic benefits of the inventory, the company may need to

Overview of Corporate Financial Reporting

Analyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

Filters