Question 1

Adam Inc. uses a perpetual inventory system.   If Adam uses the LIFO method, how much is cost of goods sold for the month of January?

Accepted Answer

A)  $204 
B)  $208 
C)  $212 
D)  $560 
A)  $204 
B)  $208 
C)  $212 
D)  $560

Question 2

Payment for the acquisition of inventories is shown on the statement of cash flows as

Accepted Answer

A)  An operating activity 
B)  An investing activity 
C)  A financing activity 
D)  Either an operating activity or a financing activity 
A)  An operating activity 
B)  An investing activity 
C)  A financing activity 
D)  Either an operating activity or a financing activity

Question 3

Refer to the information for Carlton, Inc.
How much is net sales for 2015? What other components that Carlton did not report could be included in this computation?

Accepted Answer

$951,200 Sales - $12

Question 4

Which one of the following is correct?

Accepted Answer

A)  Inventory losses can be identified and controlled better under the perpetual system. 
B)  Inventory can only be sold at the end of an accounting period under the periodic system. 
C)  There is no difference in cost to implement a perpetual as compared to a periodic system. 
D)  The perpetual system eliminates the need for an annual inventory count 
A)  Inventory losses can be identified and controlled better under the perpetual system. 
B)  Inventory can only be sold at the end of an accounting period under the periodic system. 
C)  There is no difference in cost to implement a perpetual as compared to a periodic system. 
D)  The perpetual system eliminates the need for an annual inventory count

Question 5

It important that the proper amount be assigned to inventory because the amount assigned to inventory will affect the amount eventually recorded as net sales.

Accepted Answer

A) True 
 B)False

Question 6

The weighted average cost is calculated by adding up the units' costs from each purchase and then dividing by the number of purchases.

Accepted Answer

A) True 
 B)False

Question 7

Under the periodic inventory system, a physical inventory must be taken at the end of the period to determine cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 8

Cost of goods sold represents an outflow of an asset, inventory, from the sale of products.

Accepted Answer

A) True 
 B)False

Question 9

When a company using LIFO experiences a partial or complete liquidation of its older, lower-priced inventory, its gross margin will be higher, lower, or unchanged for the period.

Accepted Answer

The answer of When a company using LIFO experiences a...

Question 10

Park, Inc. purchased merchandise from Jay Zee Music Company on June 5, 2015. The goods were shipped the same day. The merchandise's selling price was $15,000. The credit terms were 1/10, n/30. The shipping terms were FOB shipping point. Park received the merchandise on June 10, 2015. Park paid the amount due on June 13, 2015. When did title to the merchandise transfer from Jay Zee Music Company to Park?

Accepted Answer

A)  June 5, 2015 
B)  June 10, 2015 
C)  June 13, 2015 
D)  Cannot be determined from the information provided 
A)  June 5, 2015 
B)  June 10, 2015 
C)  June 13, 2015 
D)  Cannot be determined from the information provided

Question 11

Maxim Company sells auto parts. The company employs a periodic inventory system. Identify all the effects on the accounting equation.
-Recorded cash sales for the day.

Accepted Answer

A) Increase in assets 
B) Decrease in assets 
C) Increase in liabilities 
D) Decrease in liabilities 
E) Increase on owners' equity
F)Decrease in owners' equity
G)Increase in assets and increase in owners' equity
H)Decrease in assets and decrease in owners' equity
I)Increase in liabilities and decrease in owners' equity
J)Decrease in liabilities and increase in owners' equity 
A) Increase in assets 
B) Decrease in assets 
C) Increase in liabilities 
D) Decrease in liabilities 
E) Increase on owners' equity
F)Decrease in owners' equity
G)Increase in assets and increase in owners' equity
H)Decrease in assets and decrease in owners' equity
I)Increase in liabilities and decrease in owners' equity
J)Decrease in liabilities and increase in owners' equity

Question 12

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. Determine Chen's gross profit.

Accepted Answer

A)  $68,000 
B)  $72,000 
C)  $78,000 
D)  $85,000 
A)  $68,000 
B)  $72,000 
C)  $78,000 
D)  $85,000

Question 13

The inventory turnover ratio is a measure of how many times during a period a company sells off its inventory.

Accepted Answer

A) True 
 B)False

Question 14

Hawk Store counted some of its inventory twice. As a result, its operating expenses will be

Accepted Answer

A)  Correct only if Hawk Store calculates it cost of goods sold correctly 
B)  Correct since operating expenses are not affected by inventory costs 
C)  Overstated 
D)  Understated 
A)  Correct only if Hawk Store calculates it cost of goods sold correctly 
B)  Correct since operating expenses are not affected by inventory costs 
C)  Overstated 
D)  Understated

Question 15

Maxim Company sells auto parts. The company employs a periodic inventory system. Identify all the effects on the accounting equation.
-Gave a customer a cash refund.

Accepted Answer

A) Increase in assets 
B) Decrease in assets 
C) Increase in liabilities 
D) Decrease in liabilities 
E) Increase on owners' equity
F)Decrease in owners' equity
G)Increase in assets and increase in owners' equity
H)Decrease in assets and decrease in owners' equity
I)Increase in liabilities and decrease in owners' equity
J)Decrease in liabilities and increase in owners' equity 
A) Increase in assets 
B) Decrease in assets 
C) Increase in liabilities 
D) Decrease in liabilities 
E) Increase on owners' equity
F)Decrease in owners' equity
G)Increase in assets and increase in owners' equity
H)Decrease in assets and decrease in owners' equity
I)Increase in liabilities and decrease in owners' equity
J)Decrease in liabilities and increase in owners' equity

Question 16

Asago Co. sold merchandise to Health Co. on account, $18,000, terms 2/15, net 45. The cost of the merchandise sold is $15,500. Asago Co. issued a credit memo for $1,750 for merchandise returned that originally cost $1,400. The Health Co. paid the invoice within the discount period. What is amount of net sales from the above transactions?

Accepted Answer

A)  $16,250 
B)  $14,100 
C)  $15,925 
D)  $13,818 
A)  $16,250 
B)  $14,100 
C)  $15,925 
D)  $13,818

Question 17

If a company overstates its ending inventory balance for 2015 by $10,000, and overstates 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 18

With the periodic inventory system, the inventory account is updated after each sale or purchase.

Accepted Answer

A) True 
 B)False

Question 19

Purchase discounts decrease the total cost of merchandise acquired.

Accepted Answer

A) True 
 B)False

Question 20

Match the terms with the descriptions related to merchandise sales and purchases.
-The buyer must pay the shipping costs.

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

Adam Inc. uses a perpetual inventory system. If Adam uses the LIFO method, how much is cost of goods sold for the month of January?

Payment for the acquisition of inventories is shown on the statement of cash flows as

Refer to the information for Carlton, Inc. How much is net sales for 2015? What other components that Carlton did not report could be included in this computation?

Which one of the following is correct?

It important that the proper amount be assigned to inventory because the amount assigned to inventory will affect the amount eventually recorded as net sales.

The weighted average cost is calculated by adding up the units' costs from each purchase and then dividing by the number of purchases.

Under the periodic inventory system, a physical inventory must be taken at the end of the period to determine cost of goods sold.

Cost of goods sold represents an outflow of an asset, inventory, from the sale of products.

When a company using LIFO experiences a partial or complete liquidation of its older, lower-priced inventory, its gross margin will be higher, lower, or unchanged for the period.

Maxim Company sells auto parts. The company employs a periodic inventory system. Identify all the effects on the accounting equation. -Recorded cash sales for the day.

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. Determine Chen's gross profit.

The inventory turnover ratio is a measure of how many times during a period a company sells off its inventory.

Hawk Store counted some of its inventory twice. As a result, its operating expenses will be

Maxim Company sells auto parts. The company employs a periodic inventory system. Identify all the effects on the accounting equation. -Gave a customer a cash refund.

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

With the periodic inventory system, the inventory account is updated after each sale or purchase.

Purchase discounts decrease the total cost of merchandise acquired.

Match the terms with the descriptions related to merchandise sales and purchases. -The buyer must pay the shipping costs.

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

Adam Inc. uses a perpetual inventory system. If Adam uses the LIFO method, how much is cost of goods sold for the month of January?

Payment for the acquisition of inventories is shown on the statement of cash flows as

Refer to the information for Carlton, Inc. How much is net sales for 2015? What other components that Carlton did not report could be included in this computation?

Which one of the following is correct?

It important that the proper amount be assigned to inventory because the amount assigned to inventory will affect the amount eventually recorded as net sales.

The weighted average cost is calculated by adding up the units' costs from each purchase and then dividing by the number of purchases.

Under the periodic inventory system, a physical inventory must be taken at the end of the period to determine cost of goods sold.

Cost of goods sold represents an outflow of an asset, inventory, from the sale of products.

When a company using LIFO experiences a partial or complete liquidation of its older, lower-priced inventory, its gross margin will be higher, lower, or unchanged for the period.

Maxim Company sells auto parts. The company employs a periodic inventory system. Identify all the effects on the accounting equation. -Recorded cash sales for the day.

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. Determine Chen's gross profit.

The inventory turnover ratio is a measure of how many times during a period a company sells off its inventory.

Hawk Store counted some of its inventory twice. As a result, its operating expenses will be

Maxim Company sells auto parts. The company employs a periodic inventory system. Identify all the effects on the accounting equation. -Gave a customer a cash refund.

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

With the periodic inventory system, the inventory account is updated after each sale or purchase.

Purchase discounts decrease the total cost of merchandise acquired.

Match the terms with the descriptions related to merchandise sales and purchases. -The buyer must pay the shipping costs.

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