Exam 5: Inventories and Cost of Goods Sold

In order to evaluate a company's gross profit ratio,

Refer to the data for Learning Tree, Inc. If the moving average method is used, what is the amount assigned to the ending inventory on May 30?

Match the costs that might be included as part of the cost of inventory to the listed accounting treatment. -Cost of storing the goods before they are sold to customers

Givens Corp. Givens Corp. is a merchandising company that uses the periodic inventory system. Selected account balances are listed below: -Refer to the account information for Chen's Department Store Calculate Chen's cost of goods purchased

Describe how the inventories of manufacturers differ from the inventories of retailers.

For each of the following, calculate the cost of inventory reported on the balance sheet. a The total merchandise inventory counted at the end of the year was $63,000. Purchases for $6,000 are in transit under FOB shipping point terms. b The total merchandise inventory counted at the end of the year was $75,000. Purchases for $5,000 are in transit under FOB destination terms.

Federal income tax rules allow businesses to use different inventory costing methods for tax reporting and financial reporting with one exception. Which of the following situations is not allowed by federal income tax rules?

Match the costs that might be included as part of the cost of inventory to the listed accounting treatment. -Invoice price paid for resale goods

Presented below is a partially completed income statement of Deep Sea, Inc. for 2015. Using the partially completed income statement for Deep Sea, Inc., determine each of the following for 2015. A Net Sales B Beginning Inventory C Ending Inventory D Selling, General and Administrative Expenses

A counterbalancing inventory error is one where the error on the balance sheet is offset by the same amount of error on the income statement.

The understatement of ending inventories in one period leads to an of cost of goods sold expense in the same period.

The method most nearly approximates replacement cost of inventory on the balance sheet.

The cost of goods purchased is equal to net purchases plus .

Purchase returns and allowances is subtracted from cost of goods sold to determine net purchases.

Under FIFO, the units in the ending inventory represent the oldest purchases.

Which method assigns the cost of the most recent items purchased to ending inventory?

During a period of increasing cost prices, which inventory costing method will yield the lowest cost of goods sold?

A company began the year with $150,000 in inventory and ended the year with $170,000 in inventory. Cost of goods sold for the year amounted to $960,000. Assuming 360 days in a year, how long, on average, does it take the company to sell its inventory to the nearest day?

Refer to the data for Share, Inc. If the moving average method is used, how much is cost of goods sold for May?

A LIFO liquidation occurs when a company sells fewer units than it buys during the period.