Question 1

Overstating ending inventory will overstate all of the following except

Accepted Answer

A)  assets. 
B)  cost of goods sold. 
C)  net income. 
D)  owner's equity. 
A)  assets. 
B)  cost of goods sold. 
C)  net income. 
D)  owner's equity.

Question 2

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 cost of goods available for sale?

Accepted Answer

A)  $170,700 
B)  $178,500 
C)  $207,500 
D)  $300,000 
A)  $170,700 
B)  $178,500 
C)  $207,500 
D)  $300,000

Question 3

Which costing method cannot be used to determine the cost of inventory items before LCNRV is applied?

Accepted Answer

A)  Specific identification 
B)  FIFO 
C)  LIFO 
D)  All of these methods can be used. 
A)  Specific identification 
B)  FIFO 
C)  LIFO 
D)  All of these methods can be used.

Question 4

Nicholas Industries had the following inventory transactions occur during 2022: $\begin{array}{llll}&&\text {Units}&\text { Cost/unit}\\hline
2 / 1 / 22 & \text { Purchase } & 54 & \$ 45 \
3 / 14 / 22 & \text { Purchase } & 93 & \$ 47 \
5 / 1 / 22 & \text { Purchase } & 66 & \$ 49
\end{array}$ The company sold 140 units at $65 each. Assume that a periodic inventory system is used, what is the company's gross profit using LIFO?

Accepted Answer

A)  $2,388 
B)  $2,628 
C)  $6,712 
D)  $9,100 
A)  $2,388 
B)  $2,628 
C)  $6,712 
D)  $9,100

Question 5

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. If the company uses FIFO, what is the gross profit for the period?

Accepted Answer

A)  $78,250 
B)  $84,100 
C)  $81,400 
D)  $84,700 
A)  $78,250 
B)  $84,100 
C)  $81,400 
D)  $84,700

Question 6

Goods in transit should be included in the inventory of the buyer when the

Accepted Answer

A)  public carrier accepts the goods from the seller. 
B)  goods reach the buyer. 
C)  terms of sale are FOB destination. 
D)  terms of sale are FOB shipping point. 
A)  public carrier accepts the goods from the seller. 
B)  goods reach the buyer. 
C)  terms of sale are FOB destination. 
D)  terms of sale are FOB shipping point.

Question 7

Which of the following statements is correct with respect to inventories?

Accepted Answer

A)  The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold. 
B)  It is generally good business management to sell the most recently acquired goods first. 
C)  Under FIFO, the ending inventory is based on the latest units purchased. 
D)  FIFO seldom coincides with the actual physical flow of inventory. 
A)  The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold. 
B)  It is generally good business management to sell the most recently acquired goods first. 
C)  Under FIFO, the ending inventory is based on the latest units purchased. 
D)  FIFO seldom coincides with the actual physical flow of inventory.

Question 8

Instructions
1. Show computations to cost the ending inventory using the FIFO method if 600 units remain on hand at October 31.
2. Show computations to cost the ending inventory using the weighted-average cost method if 600 units remain on hand at October 31.
3. Show computations to cost the ending inventory using the LIFO method if 600 units remain on hand at October 31.

Accepted Answer

@#IMG-DLM& [Tot. cost of beg. inv. + ((N

Question 9

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. The weighted-average cost per unit is

Accepted Answer

A)  $8.00. 
B)  $8.60. 
C)  $8.30. 
D)  $8.15. 
A)  $8.00. 
B)  $8.60. 
C)  $8.30. 
D)  $8.15.

Question 10

When costing ending inventory under a perpetual inventory system, the

Accepted Answer

A)  cost using the LIFO method is the same as the cost using the LIFO method under the periodic inventory system. 
B)  moving average requires that a new average be computed after every sale. 
C)  cost using the FIFO method is the same as under the periodic inventory system. 
D)  earliest units purchased during the period using the LIFO assumption are allocated to the cost of goods sold when units are sold. 
A)  cost using the LIFO method is the same as the cost using the LIFO method under the periodic inventory system. 
B)  moving average requires that a new average be computed after every sale. 
C)  cost using the FIFO method is the same as under the periodic inventory system. 
D)  earliest units purchased during the period using the LIFO assumption are allocated to the cost of goods sold when units are sold.

Question 11

Inventory transactions affect

Accepted Answer

A)  only the balance sheet. 
B)  only the income statement. 
C)  both the balance sheet and the income statement. 
D)  neither the balance sheet nor the income statement. 
A)  only the balance sheet. 
B)  only the income statement. 
C)  both the balance sheet and the income statement. 
D)  neither the balance sheet nor the income statement.

Question 12

Pancho Steinberg's uses the retail inventory method. A formula not used by the company is:

Accepted Answer

A)  Goods Available for Sale at Retail - Net Sales = Ending Inventory at Retail. 
B)  Goods Available for Sale at Cost / Goods Available for Sale at Retail = Cost-to-Retail Ratio. 
C)  Goods Available for Sale at Retail - Goods Available for Sale at Cost = Retail Price of Goods Sold. 
D)  Ending Inventory at Retail X Cost-to-Retail Ratio = Estimated Cost of Ending Inventory. 
A)  Goods Available for Sale at Retail - Net Sales = Ending Inventory at Retail. 
B)  Goods Available for Sale at Cost / Goods Available for Sale at Retail = Cost-to-Retail Ratio. 
C)  Goods Available for Sale at Retail - Goods Available for Sale at Cost = Retail Price of Goods Sold. 
D)  Ending Inventory at Retail X Cost-to-Retail Ratio = Estimated Cost of Ending Inventory.

Question 13

Storme Shutters has the following inventory information. $\begin{array}{rrr}
\text { Nov. }&1 & \text { Inventory } & 30 \text { units } @ \$ 8.00 \
&8 & \text { Purchase } & 120 \text { units } \$ 8.30 \
&17 & \text { Purchase } & 60 \text { units } \$ 8 .40 \
&25 & \text { Purchase } & 90 \text { units } \$ 8.80
\end{array}$ A physical count of merchandise inventory on November 30 reveals that there are 80 units on hand. Assuming that the specific identification method is used and that ending inventory consists of 20 units from each of the three purchases and 20 units from the November 1 inventory, cost of goods sold is

Accepted Answer

A)  $1,758. 
B)  $1,870. 
C)  $1,862. 
D)  $1,812. 
A)  $1,758. 
B)  $1,870. 
C)  $1,862. 
D)  $1,812.

Question 14

Which of the following often parallels the actual physical flow of merchandise?

Accepted Answer

A)  LIFO 
B)  Dollar-value LIFO 
C)  Average-cost 
D)  FIFO 
A)  LIFO 
B)  Dollar-value LIFO 
C)  Average-cost 
D)  FIFO

Question 15

The accountant at Peacock Company has determined that gross profit amounted to $6,500 using the FIFO costing method. If the grossprofit is $1,060 greater than if the LIFO costing method were used, what would be the amount of gross profit under the LIFO method?

Accepted Answer

A)  $0 
B)  $5,440 
C)  $6,500 
D)  $7,560 
A)  $0 
B)  $5,440 
C)  $6,500 
D)  $7,560

Question 16

The Vogelson Company accumulates the following cost and net realizable value data at December 31. $\begin{array}{lrr}\text {Inventory Categories}&\text { Cost Data}&\text {NRV }\\hline
\text { Camera } & \$ 11,000 & \$ 9,900 \
\text { Camcorders } & 7,800 & 8,500 \
\text { DVDs } & 14,000 & 12,000
\end{array}$ What is the lower-of-cost-or-NRV amount for the inventory?

Accepted Answer

@#IMG-DLM& [Camera (NRV) + Cam

Question 17

The following amounts are reported for Bainbridge Company:
Advertising expense
Freight-in
Cost of inventory purchased
Delivery expense
Salaries expense
Sales revenue
Which of the amounts would be included in calculating the cost of inventory?

Accepted Answer

Freight-in

Question 18

Irish Company uses the periodic inventory system and had the following inventory information available:   A physical count of inventory on December 31 revealed that there were 480 units on hand.
Instructions
1. Assume that the company uses the FIFO method. The cost of the ending inventory at December 31 is $__________.
2. Assume that the company uses the Average-Cost method. The cost of the ending inventory on December 31 is $__________.
3. Assume that the company uses the LIFO method. The cost of the ending inventory on December 31 is $__________.
4. Determine the difference in the amount of gross profit that the company would have reported if it had used the FIFO method instead of the LIFO method. Would gross profit have been greater or less?

Accepted Answer

@#IMG-DLM& [Tot. cost of 10/20 purch. + ((No. unit

Question 19

A company purchased inventory as follows: 150 units at $ \$ 6 $
350 units at $ \$ 7 $ The average unit cost for inventory is

Accepted Answer

A)  $6.00. 
B)  $6.50. 
C)  $6.70. 
D)  $7.00. 
A)  $6.00. 
B)  $6.50. 
C)  $6.70. 
D)  $7.00.

Question 20

FIFO and LIFO are the two most common cost flow assumptions made in costing inventories. The amounts assigned to the same inventory items on hand may be different under each cost flow assumption. If a company has no beginning inventory, explain the difference in ending inventory values under the FIFO and LIFO cost bases when the cost of inventory items purchased during the period have been (1) increasing, (2) decreasing, and (3) remained constant.

Accepted Answer

The FIFO method determines the ending in

Overstating ending inventory will overstate all of the following except

Which costing method cannot be used to determine the cost of inventory items before LCNRV is applied?

Goods in transit should be included in the inventory of the buyer when the

Which of the following statements is correct with respect to inventories?

When costing ending inventory under a perpetual inventory system, the

Inventory transactions affect

Pancho Steinberg's uses the retail inventory method. A formula not used by the company is:

Which of the following often parallels the actual physical flow of merchandise?

The accountant at Peacock Company has determined that gross profit amounted to $6,500 using the FIFO costing method. If the grossprofit is $1,060 greater than if the LIFO costing method were used, what would be the amount of gross profit under the LIFO method?

The Vogelson Company accumulates the following cost and net realizable value data at December 31. Inventory Categories Cost Data NRV Camera \ 11,000 \ 9,900 Camcorders 7,800 8,500 DVDs 14,000 12,000 What is the lower-of-cost-or-NRV amount for the inventory?

The following amounts are reported for Bainbridge Company: Advertising expense Freight-in Cost of inventory purchased Delivery expense Salaries expense Sales revenue Which of the amounts would be included in calculating the cost of inventory?

A company purchased inventory as follows: 150 units at $\$ 6$ 350 units at $\$ 7$ The average unit cost for inventory is

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

Overstating ending inventory will overstate all of the following except

Which costing method cannot be used to determine the cost of inventory items before LCNRV is applied?

Goods in transit should be included in the inventory of the buyer when the

Which of the following statements is correct with respect to inventories?

When costing ending inventory under a perpetual inventory system, the

Inventory transactions affect

Pancho Steinberg's uses the retail inventory method. A formula not used by the company is:

Which of the following often parallels the actual physical flow of merchandise?

The accountant at Peacock Company has determined that gross profit amounted to $6,500 using the FIFO costing method. If the grossprofit is $1,060 greater than if the LIFO costing method were used, what would be the amount of gross profit under the LIFO method?

The Vogelson Company accumulates the following cost and net realizable value data at December 31. Inventory Categories Cost Data NRV Camera \ 11,000 \ 9,900 Camcorders 7,800 8,500 DVDs 14,000 12,000 What is the lower-of-cost-or-NRV amount for the inventory?

The following amounts are reported for Bainbridge Company: Advertising expense Freight-in Cost of inventory purchased Delivery expense Salaries expense Sales revenue Which of the amounts would be included in calculating the cost of inventory?

A company purchased inventory as follows: 150 units at $6 \$ 6 $6 350 units at $7 \$ 7 $7 The average unit cost for inventory is

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

A company purchased inventory as follows: 150 units at $\$ 6$ 350 units at $\$ 7$ The average unit cost for inventory is