Question 1

When merchandise is sold FOB shipping point, the buyer is responsible for the shipping costs.

Accepted Answer

A) True 
 B)False

Question 2

If a company overstates its ending inventory balance for 2015 by $10,000, and understates its ending inventory balance for 2014 by $5,000 what are the effects on its net income for 2015 and 2014?

Accepted Answer

The answer of If a company overstates its ending inventory...

Question 3

Match the costs that might be included as part of the cost of inventory to the listed accounting treatment.
-Freight costs incurred by the seller to ship goods to its customers

Accepted Answer

A) Add to inventory cost 
B) Subtract from inventory cost 
C) Not an inventory cost 
A) Add to inventory cost 
B) Subtract from inventory cost 
C) Not an inventory cost

Question 4

Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers.
-Costs of direct materials, overhead, and direct labor used in goods that have been sold.

Accepted Answer

A) Merchandise Inventory 
B) Raw Materials 
C) Work in Process 
D) Finished Goods 
E) Cost of Goods Sold 
A) Merchandise Inventory 
B) Raw Materials 
C) Work in Process 
D) Finished Goods 
E) Cost of Goods Sold

Question 5

Match the terms with the descriptions related to merchandise sales and purchases.
-Shipping costs paid to acquire merchandise.

Accepted Answer

A) Transportation-in 
B) Perpetual inventory system 
C) Net purchases 
D) FOB Destination 
E) Cost of goods available for sale
F)Periodic inventory system
G)FOB Shipping point
H)Delivery expense 
A) Transportation-in 
B) Perpetual inventory system 
C) Net purchases 
D) FOB Destination 
E) Cost of goods available for sale
F)Periodic inventory system
G)FOB Shipping point
H)Delivery expense

Question 6

On the income statement of a merchandising company, cost of goods is added to net sales to arrive at gross margin or gross profit.

Accepted Answer

A) True 
 B)False

Question 7

Xu Corp. started business at the beginning of 2015. Xu selected the FIFO method for its inventory. In order to maximize its profits for 2015 under this method, prices must be

Accepted Answer

A)  Increasing 
B)  Decreasing 
C)  Stable 
D)  Fluctuating up and down at the same amount consistently over the year 
A)  Increasing 
B)  Decreasing 
C)  Stable 
D)  Fluctuating up and down at the same amount consistently over the year

Question 8

The following is from Goldman Inc.'s 2015 income statement.   How much will Goldman report as its cost of goods sold in its 2015 income statement?

Accepted Answer

A)  $179,900 
B)  $182,300 
C)  $186,900 
D)  $190,700 
A)  $179,900 
B)  $182,300 
C)  $186,900 
D)  $190,700

Question 9

Which one of the following statements regarding changing inventory methods is true?

Accepted Answer

A)  A change in inventory methods can be justified if the change is made to better match profits with revenue. 
B)  Changing inventory methods affects consistency. 
C)  One place that the reader of an annual report would be able to identify that a company changed inventory methods is the statement of stockholders' equity. 
D)  Tax advantages are valid justification for changing inventory methods. 
A)  A change in inventory methods can be justified if the change is made to better match profits with revenue. 
B)  Changing inventory methods affects consistency. 
C)  One place that the reader of an annual report would be able to identify that a company changed inventory methods is the statement of stockholders' equity. 
D)  Tax advantages are valid justification for changing inventory methods.

Question 10

-Klein's Shoe Company uses a perpetual inventory system. The beginning balance in its inventory account is $1,500 and the ending balance is $1,000. Cost of goods sold is $6,500. What was the amount of inventory purchased during the year?

Accepted Answer

A)  $500 
B)  $6,000 
C)  $7,000 
D)  $7,500 
A)  $500 
B)  $6,000 
C)  $7,000 
D)  $7,500

Question 11

Carrington, Inc. began the year with $130,000 in merchandise inventory and ended the year with $190,000. Sales and cost of goods sold for the year were $900,000 and $640,000, respectively. Use a 360 day year in your calculations.
Required:
1. Compute Carrington's inventory turnover ratio.
2. Compute the number of days' sales in inventory.

Accepted Answer

1. Inventory Turnover Ratio = Cost of Go

Question 12

Refer to the information for Carlton, Inc.
How much is the cost of net purchases for 2015?

Accepted Answer

$580,000 Purchases +

Question 13

Based upon the following data, determine the cost of merchandise sold for April.

Accepted Answer

The answer of Based upon the following data, determine the...

Question 14

Assets are unexpired costs, and expenses are expired costs.

Accepted Answer

A) True 
 B)False

Question 15

Readers.com uses a perpetual inventory system.   If Readers.com uses the moving average method, how much is ending inventory on February 28?

Accepted Answer

A)  $300 
B)  $306 
C)  $312 
D)  $318 
A)  $300 
B)  $306 
C)  $312 
D)  $318

Question 16

Cost of goods sold is equal to:

Accepted Answer

A)  the total amount of merchandise purchased during the year. 
B)  the cost of merchandise purchased plus transportation-in costs less ending inventory. 
C)  the cost of merchandise purchased plus transportation-in costs plus beginning inventory minus purchase returns and allowances and purchase discounts minus ending inventory. 
D)  the cost of merchandise purchased plus transportation-in costs plus beginning inventory minus purchase returns and allowances and purchase discounts 
A)  the total amount of merchandise purchased during the year. 
B)  the cost of merchandise purchased plus transportation-in costs less ending inventory. 
C)  the cost of merchandise purchased plus transportation-in costs plus beginning inventory minus purchase returns and allowances and purchase discounts minus ending inventory. 
D)  the cost of merchandise purchased plus transportation-in costs plus beginning inventory minus purchase returns and allowances and purchase discounts

Question 17

Specific identification relies on matching unit costs with the actual units sold.

Accepted Answer

A) True 
 B)False

Question 18

Refer to the data for Share, Inc.
Required:
1. If the FIFO method is used, how much is ending inventory on May 30?
2. How does this differ from the amount calculated using a periodic system and FIFO?

Accepted Answer

1. 10 × $3.00 = $30
2. There i

Question 19

The inventory costing method is applied after each sale of merchandise to update the Inventory account.

Accepted Answer

A) True 
 B)False

Question 20

Refer to the information for Carlton, Inc.
What amount is cost of goods available for sale for 2015?

Accepted Answer

$580,000 Purchases + $18,000 T

When merchandise is sold FOB shipping point, the buyer is responsible for the shipping costs.

If a company overstates its ending inventory balance for 2015 by $10,000, and understates its ending inventory balance for 2014 by $5,000 what are the effects on its net income for 2015 and 2014?

Match the costs that might be included as part of the cost of inventory to the listed accounting treatment. -Freight costs incurred by the seller to ship goods to its customers

Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers. -Costs of direct materials, overhead, and direct labor used in goods that have been sold.

Match the terms with the descriptions related to merchandise sales and purchases. -Shipping costs paid to acquire merchandise.

On the income statement of a merchandising company, cost of goods is added to net sales to arrive at gross margin or gross profit.

Xu Corp. started business at the beginning of 2015. Xu selected the FIFO method for its inventory. In order to maximize its profits for 2015 under this method, prices must be

The following is from Goldman Inc.'s 2015 income statement. How much will Goldman report as its cost of goods sold in its 2015 income statement?

Which one of the following statements regarding changing inventory methods is true?

-Klein's Shoe Company uses a perpetual inventory system. The beginning balance in its inventory account is $1,500 and the ending balance is $1,000. Cost of goods sold is $6,500. What was the amount of inventory purchased during the year?

Refer to the information for Carlton, Inc. How much is the cost of net purchases for 2015?

Based upon the following data, determine the cost of merchandise sold for April.

Assets are unexpired costs, and expenses are expired costs.

Readers.com uses a perpetual inventory system. If Readers.com uses the moving average method, how much is ending inventory on February 28?

Cost of goods sold is equal to:

Specific identification relies on matching unit costs with the actual units sold.

Refer to the data for Share, Inc. Required: 1. If the FIFO method is used, how much is ending inventory on May 30? 2. How does this differ from the amount calculated using a periodic system and FIFO?

The inventory costing method is applied after each sale of merchandise to update the Inventory account.

Refer to the information for Carlton, Inc. What amount is cost of goods available for sale for 2015?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

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Exam 5: Inventories and Cost of Goods Sold

When merchandise is sold FOB shipping point, the buyer is responsible for the shipping costs.

If a company overstates its ending inventory balance for 2015 by $10,000, and understates its ending inventory balance for 2014 by $5,000 what are the effects on its net income for 2015 and 2014?

Match the costs that might be included as part of the cost of inventory to the listed accounting treatment. -Freight costs incurred by the seller to ship goods to its customers

Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers. -Costs of direct materials, overhead, and direct labor used in goods that have been sold.

Match the terms with the descriptions related to merchandise sales and purchases. -Shipping costs paid to acquire merchandise.

On the income statement of a merchandising company, cost of goods is added to net sales to arrive at gross margin or gross profit.

Xu Corp. started business at the beginning of 2015. Xu selected the FIFO method for its inventory. In order to maximize its profits for 2015 under this method, prices must be

The following is from Goldman Inc.'s 2015 income statement. How much will Goldman report as its cost of goods sold in its 2015 income statement?

Which one of the following statements regarding changing inventory methods is true?

-Klein's Shoe Company uses a perpetual inventory system. The beginning balance in its inventory account is $1,500 and the ending balance is $1,000. Cost of goods sold is $6,500. What was the amount of inventory purchased during the year?

Refer to the information for Carlton, Inc. How much is the cost of net purchases for 2015?

Based upon the following data, determine the cost of merchandise sold for April.

Assets are unexpired costs, and expenses are expired costs.

Readers.com uses a perpetual inventory system. If Readers.com uses the moving average method, how much is ending inventory on February 28?

Cost of goods sold is equal to:

Specific identification relies on matching unit costs with the actual units sold.

Refer to the data for Share, Inc. Required: 1. If the FIFO method is used, how much is ending inventory on May 30? 2. How does this differ from the amount calculated using a periodic system and FIFO?

The inventory costing method is applied after each sale of merchandise to update the Inventory account.

Refer to the information for Carlton, Inc. What amount is cost of goods available for sale for 2015?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters