Question 1

Purchased goods that have been shipped FOB destination but which are in transit at the end of the period should be excluded from the buyer's physical count of ending inventory.

Accepted Answer

A) True 
 B)False

Question 2

Norris Company uses the perpetual inventory system and had the following purchases and sales during March.   Instructions
Using the inventory and sales data above, calculate the cost assigned to cost of goods sold in March and to the ending inventory at March 31 using (a) FIFO and (b) LIFO.

Accepted Answer

The answer of Norris Company uses the perpetual inventory system...

Question 3

The widely used method (methods) of estimating inventories is (are)

Accepted Answer

A)  not the gross profit method or the retail inventory method. 
B)  the gross profit method and the retail inventory method. 
C)  the gross profit method. 
D)  the retail inventory method. 
A)  not the gross profit method or the retail inventory method. 
B)  the gross profit method and the retail inventory method. 
C)  the gross profit method. 
D)  the retail inventory method.

Question 4

The cost of goods available for sale is allocated between

Accepted Answer

A)  beginning inventory and ending inventory. 
B)  beginning inventory and cost of goods on hand. 
C)  ending inventory and cost of goods sold. 
D)  beginning inventory and cost of goods purchased. 
A)  beginning inventory and ending inventory. 
B)  beginning inventory and cost of goods on hand. 
C)  ending inventory and cost of goods sold. 
D)  beginning inventory and cost of goods purchased.

Question 5

Which of the following is not a common cost flow method used in costing inventory?

Accepted Answer

A)  First-in, first-out 
B)  Middle-in, first-out 
C)  Last-in, first-out 
D)  Average cost 
A)  First-in, first-out 
B)  Middle-in, first-out 
C)  Last-in, first-out 
D)  Average cost

Question 6

Elly Company uses a periodic inventory system. Details for the inventory and purchases accounts for the month of January, 2022 are as follows: $\begin{array}{llrr}&\text { Units } &\text { Per unit price } & \text { Total }\
\hline\text { Balance, } 1 / 1 / 22 &200& \$ 5.00 & \$ 1,000 \
\text { Purchase, } 1 / 15 / 22 & 100 & 5.30 & 530 \
\text { Purchase, } 1 / 28 / 22 & 100 & 5.50 & 550
\end{array}$ An end of the month (1/31/20) inventory showed that 150 units were on hand. If the company uses LIFO, what is the cost of the ending inventory?

Accepted Answer

A)  $750 
B)  $805 
C)  $850 
D)  $815 
A)  $750 
B)  $805 
C)  $850 
D)  $815

Question 7

Winters Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should 1. Goods shipped on consignment by Winters to another company.
2. Goods in transit from a supplier shipped FOB destination.
3. Goods shipped via common carrier to a customer with terms FOB shipping point.
4. Goods held on consignment from another company.

Accepted Answer

1. Include

Question 8

Which of the following statements is true regarding inventory cost flow methods?

Accepted Answer

A)  A company may use more than one costing method concurrently. 
B)  A company must comply with the method specified by industry standards. 
C)  A company must use the same method for domestic and foreign operations. 
D)  A company may never change its inventory costing method once it has chosen a method. 
A)  A company may use more than one costing method concurrently. 
B)  A company must comply with the method specified by industry standards. 
C)  A company must use the same method for domestic and foreign operations. 
D)  A company may never change its inventory costing method once it has chosen a method.

Question 9

Which of the following should be included in the ending inventory of a company?

Accepted Answer

A)  Goods held on consignment from another company. 
B)  Goods in transit to another company shipped FOB shipping point. 
C)  Goods in transit from another company shipped FOB shipping point. 
D)  Goods in transit from another company shipped FOB destination. 
A)  Goods held on consignment from another company. 
B)  Goods in transit to another company shipped FOB shipping point. 
C)  Goods in transit from another company shipped FOB shipping point. 
D)  Goods in transit from another company shipped FOB destination.

Question 10

If beginning inventory is understated by $15,000, the effect of this error in the current period is

Accepted Answer

The answer of If beginning inventory is understated by $15,000,...

Question 11

The LCNRV basis of valuing inventories is an example of

Accepted Answer

A)  comparability. 
B)  the historical cost principle. 
C)  conservatism. 
D)  consistency. 
A)  comparability. 
B)  the historical cost principle. 
C)  conservatism. 
D)  consistency.

Question 12

The cost flow method that often parallels the actual physical flow of merchandise is the

Accepted Answer

A)  FIFO method. 
B)  LIFO method. 
C)  average-cost method. 
D)  gross profit method. 
A)  FIFO method. 
B)  LIFO method. 
C)  average-cost method. 
D)  gross profit method.

Question 13

Errors occasionally occur when physically counting inventory items on hand. Identify the financial statement effects of an overstatement of the ending inventory in the current period. If the error is not corrected, how does it affect the financial statements for the following year?

Accepted Answer

The overstatement of ending inventory wi

Question 14

Under the LIFO method and a perpetual inventory system, companies charge to cost of goods sold the cost of the

Accepted Answer

A)  last purchase of the period. 
B)  oldest purchase prior to sale. 
C)  most recent purchase prior to sale. 
D)  last purchase of the prior period. 
A)  last purchase of the period. 
B)  oldest purchase prior to sale. 
C)  most recent purchase prior to sale. 
D)  last purchase of the prior period.

Question 15

If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.

Accepted Answer

A) True 
 B)False

Question 16

Henri Company's inventory and purchases accounts show the following data: $\begin{array}{llrr}&&\text {Units }&\text {Unit Cost }\\hline
\text { Inventory, } & \text { January 1 } & 10,000 & \$ 9.20 \
\text { Purchases: } & \text { June 18 } & 9,000 & 8.00 \
& \text { Novermber 8 } & 6,000 & 7.25
\end{array}$ A physical inventory on December 31 shows 3,000 units on hand. Henri sells the units for $12 each. Henri uses the periodic inventory method. What is the difference in net income if LIFO rather than FIFO is used?

Accepted Answer

A)  $5,850 less net income 
B)  $3,150 less net income 
C)  $6,450 less net income 
D)  $3,150 additional net income 
A)  $5,850 less net income 
B)  $3,150 less net income 
C)  $6,450 less net income 
D)  $3,150 additional net income

Question 17

Pasquale has the following inventory information. $\begin{array}{rrrr}\text { July } 1&\text { Beginning Inventory }&20 \text { units at } \$ 19&\$380\
7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \
22 & \text { Purchases } & 10 \text { units at } \$ 24 & 240\&&&\$2,020
\end{array}$ A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using a periodic inventory system and the average-cost method, the cost of ending inventory is

Accepted Answer

A)  $585. 
B)  $606. 
C)  $630. 
D)  $660. 
A)  $585. 
B)  $606. 
C)  $630. 
D)  $660.

Question 18

An auto manufacturer would classify vehicles in various stages of production as

Accepted Answer

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

Question 19

In a period of rising prices, the costs allocated to ending inventory may be understated in the

Accepted Answer

A)  average-cost method. 
B)  FIFO method. 
C)  gross profit method. 
D)  LIFO method. 
A)  average-cost method. 
B)  FIFO method. 
C)  gross profit method. 
D)  LIFO method.

Question 20

Inventories are reported in the current assets section of the balance sheet immediately below receivables.

Accepted Answer

A) True 
 B)False

Purchased goods that have been shipped FOB destination but which are in transit at the end of the period should be excluded from the buyer's physical count of ending inventory.

Norris Company uses the perpetual inventory system and had the following purchases and sales during March. Instructions Using the inventory and sales data above, calculate the cost assigned to cost of goods sold in March and to the ending inventory at March 31 using (a) FIFO and (b) LIFO.

The widely used method (methods) of estimating inventories is (are)

The cost of goods available for sale is allocated between

Which of the following is not a common cost flow method used in costing inventory?

Which of the following statements is true regarding inventory cost flow methods?

Which of the following should be included in the ending inventory of a company?

If beginning inventory is understated by $15,000, the effect of this error in the current period is

The LCNRV basis of valuing inventories is an example of

The cost flow method that often parallels the actual physical flow of merchandise is the

Errors occasionally occur when physically counting inventory items on hand. Identify the financial statement effects of an overstatement of the ending inventory in the current period. If the error is not corrected, how does it affect the financial statements for the following year?

Under the LIFO method and a perpetual inventory system, companies charge to cost of goods sold the cost of the

If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.

An auto manufacturer would classify vehicles in various stages of production as

In a period of rising prices, the costs allocated to ending inventory may be understated in the

Inventories are reported in the current assets section of the balance sheet immediately below receivables.

Welcome to Accounting

The Accounting Equation and Transaction Analysis

The Recording Process: Debits and Credits

The Recording Process: the Journal, the Ledger, and the Trial Balance

Adjusting the Accounts and Preparing an Adjusted Trial Balance

Completing a Worksheet and Completing the Accounting Cycle

Merchandising Companies: Purchases Perpetual

Merchandising Companies: Sales Perpetual

Merchandising Companies: Worksheets and Financial Statements Perpetual

Special Journals

Cash, Banking, and Internal Controls

Payroll Accounting: Employee Taxes and Records

Payroll Accounting: Employer Taxes and Records

Filters

Exam 11: Inventory

Purchased goods that have been shipped FOB destination but which are in transit at the end of the period should be excluded from the buyer's physical count of ending inventory.

Norris Company uses the perpetual inventory system and had the following purchases and sales during March. Instructions Using the inventory and sales data above, calculate the cost assigned to cost of goods sold in March and to the ending inventory at March 31 using (a) FIFO and (b) LIFO.

The widely used method (methods) of estimating inventories is (are)

The cost of goods available for sale is allocated between

Which of the following is not a common cost flow method used in costing inventory?

Which of the following statements is true regarding inventory cost flow methods?

Which of the following should be included in the ending inventory of a company?

If beginning inventory is understated by $15,000, the effect of this error in the current period is

The LCNRV basis of valuing inventories is an example of

The cost flow method that often parallels the actual physical flow of merchandise is the

Errors occasionally occur when physically counting inventory items on hand. Identify the financial statement effects of an overstatement of the ending inventory in the current period. If the error is not corrected, how does it affect the financial statements for the following year?

Under the LIFO method and a perpetual inventory system, companies charge to cost of goods sold the cost of the

If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.

An auto manufacturer would classify vehicles in various stages of production as

In a period of rising prices, the costs allocated to ending inventory may be understated in the

Inventories are reported in the current assets section of the balance sheet immediately below receivables.

Welcome to Accounting

The Accounting Equation and Transaction Analysis

The Recording Process: Debits and Credits

The Recording Process: the Journal, the Ledger, and the Trial Balance

Adjusting the Accounts and Preparing an Adjusted Trial Balance

Completing a Worksheet and Completing the Accounting Cycle

Merchandising Companies: Purchases Perpetual

Merchandising Companies: Sales Perpetual

Merchandising Companies: Worksheets and Financial Statements Perpetual

Special Journals

Cash, Banking, and Internal Controls

Payroll Accounting: Employee Taxes and Records

Payroll Accounting: Employer Taxes and Records

Filters