Question 1

Goods which Smith has shipped out on consignment should be included in Smith's inventory.

Accepted Answer

A) True 
 B)False

Question 2

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

Accepted Answer

A) True 
 B)False

Question 3

A company should use the same cost flow method from period to period.

Accepted Answer

A) True 
 B)False

Question 4

Quayle Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows:   Quayle maintains a periodic inventory system. According to a physical count, 360 units were on hand at January 31. The cost of the inventory at January 31, under the FIFO method is:

Accepted Answer

A)  $3,240. 
B)  $3,650. 
C)  $4,100. 
D)  $3,820. 
A)  $3,240. 
B)  $3,650. 
C)  $4,100. 
D)  $3,820.

Question 5

The first-in, first-out (FIFO) inventory method results in an ending inventory reported at the most recent cost.

Accepted Answer

A) True 
 B)False

Question 6

If the unit cost of inventory has continuously increased, the ______________, first-out cost flow method will result in a higher ending inventory cost than if the ______________, first-out method had been used.

Accepted Answer

first-in,

Question 7

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. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO?

Accepted Answer

A)  $2,388 
B)  $2,628 
C)  $6,472 
D)  $6,712 
A)  $2,388 
B)  $2,628 
C)  $6,472 
D)  $6,712

Question 8

Understating beginning inventory will understate

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 9

A company just starting business made the following four inventory purchases in June: $\begin{array}{lll}\text { June } 1 &150 \text { units } & \$390\
\text { June } 10 & 200 \text { units } & 598 \
\text { June } 15 & 200 \text { units } & 630 \
\text { June } 28 & 150 \text { units } & 510 \
&&\$2,128
\end{array}$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using a periodic inventory system, the inventory method which results in the highest gross profit for June is

Accepted Answer

A)  the FIFO method. 
B)  the LIFO method. 
C)  the weighted average unit cost method. 
D)  not determinable. 
A)  the FIFO method. 
B)  the LIFO method. 
C)  the weighted average unit cost method. 
D)  not determinable.

Question 10

Under a consignment arrangement, the

Accepted Answer

A)  company that shipped the goods has ownership until goods are sold to a final customer by the other company. 
B)  company that shipped the goods has ownership until goods are shipped to the other company. 
C)  company holding the goods has ownership when the goods are in their possession. 
D)  consigned goods are included in the inventory of the company holding them. 
A)  company that shipped the goods has ownership until goods are sold to a final customer by the other company. 
B)  company that shipped the goods has ownership until goods are shipped to the other company. 
C)  company holding the goods has ownership when the goods are in their possession. 
D)  consigned goods are included in the inventory of the company holding them.

Question 11

Elly Company uses a periodic inventory system. Details for the inventoryand 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 (1/31/22) inventory showed that 150 units were on hand. How many units did the company sell during January, 2022?

Accepted Answer

A)  50 
B)  150 
C)  200 
D)  250 
A)  50 
B)  150 
C)  200 
D)  250

Question 12

Your former college roommate is opening a new retail store and asks you "Which inventory costing method should I use?"
What is your response? Include a comparison of the balance sheet effect and the income statement effect for FIFO versus LIFO.

Accepted Answer

The answer of Your former college roommate is opening a...

Question 13

Queen Company is in the electronics industry and the cost for inventory is decreasing.
Instructions
Indicate which inventory method will:
a. provide the highest ending inventory.
b. provide the highest cost of goods sold.
c. result in the lowest gross profit.
d. produce the most stable gross profit over several years.

Accepted Answer

a. LIFO
b.

Question 14

Heathroton Company's goods in transit at December 31 include:   Which items should be included in Heathroton's inventory at December 31?

Accepted Answer

A)  (2) and (3) 
B)  (1) and (4) 
C)  (1) and (3) 
D)  (2) and (4) 
A)  (2) and (3) 
B)  (1) and (4) 
C)  (1) and (3) 
D)  (2) and (4)

Question 15

Cost of goods available for sale is allocated to ______________ and cost of goods ____________.

Accepted Answer

cost of go

Question 16

Oscar Industries has the following inventory information. $\begin{array}{rll}
\text { July } 1 & \text { Beginning Inventory } & 40 \text { units at } \$ 110 \
5 & \text { Purchases } & 240 \text { units at } \$ 112 \
14 & \text { Sale } & 160 \text { units } \
21 & \text { Purchases } & 120 \text { units at } \$ 115 \
30 & \text { Sale } & 150 \text { units }
\end{array}$ Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis?

Accepted Answer

A)  $10,350 
B)  $10,000 
C)  $35,080 
D)  $34,730 
A)  $10,350 
B)  $10,000 
C)  $35,080 
D)  $34,730

Question 17

E. Preslay Company prepares monthly financial statements and uses the gross profit method to estimate ending inventories. Historically, the company has had a 40% gross profit rate. During June, net sales amounted to $200,000; the beginning inventory on June 1 was $60,000; and the cost of goods purchased during June amounted to $90,000. The estimated cost of E. Preslay Company's inventory on June 30 is

Accepted Answer

A)  $24,000. 
B)  $30,000. 
C)  $70,000. 
D)  $140,000. 
A)  $24,000. 
B)  $30,000. 
C)  $70,000. 
D)  $140,000.

Question 18

The inventory of Willamette Company was destroyed by fire on April 1. From an examination of the accounting records, the following data for the first three months of the year are compiled: $\begin{array}{lr}
\text { Net Sales } & \$ 180,000 \
\text { Purchases } & 106,500 \
\text { Freight-ln } & 4,000
\end{array}$ Instructions
Determine the merchandise lost by fire, assuming a beginning inventory of $60,000 and a gross profit rate of 45% on net sales.

Accepted Answer

\(\begin{array}{lr}
\text { Net Sales }

Question 19

The cost of goods available for sale is allocated to the cost of goods sold and the

Accepted Answer

A)  beginning inventory. 
B)  ending inventory. 
C)  cost of goods purchased. 
D)  gross profit. 
A)  beginning inventory. 
B)  ending inventory. 
C)  cost of goods purchased. 
D)  gross profit.

Question 20

Under the gross profit method, each of the following items are estimated except for the

Accepted Answer

A)  cost of ending inventory. 
B)  cost of goods sold. 
C)  cost of goods purchased. 
D)  gross profit. 
A)  cost of ending inventory. 
B)  cost of goods sold. 
C)  cost of goods purchased. 
D)  gross profit.

Goods which Smith has shipped out on consignment should be included in Smith's inventory.

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

A company should use the same cost flow method from period to period.

The first-in, first-out (FIFO) inventory method results in an ending inventory reported at the most recent cost.

If the unit cost of inventory has continuously increased, the , first-out cost flow method will result in a higher ending inventory cost than if the , first-out method had been used.

Understating beginning inventory will understate

Under a consignment arrangement, the

Your former college roommate is opening a new retail store and asks you "Which inventory costing method should I use?" What is your response? Include a comparison of the balance sheet effect and the income statement effect for FIFO versus LIFO.

Heathroton Company's goods in transit at December 31 include: Which items should be included in Heathroton's inventory at December 31?

Cost of goods available for sale is allocated to __ and cost of goods .

The cost of goods available for sale is allocated to the cost of goods sold and the

Under the gross profit method, each of the following items are estimated except for the

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

Goods which Smith has shipped out on consignment should be included in Smith's inventory.

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

A company should use the same cost flow method from period to period.

The first-in, first-out (FIFO) inventory method results in an ending inventory reported at the most recent cost.

If the unit cost of inventory has continuously increased, the ______________, first-out cost flow method will result in a higher ending inventory cost than if the ______________, first-out method had been used.

Understating beginning inventory will understate

Under a consignment arrangement, the

Your former college roommate is opening a new retail store and asks you "Which inventory costing method should I use?" What is your response? Include a comparison of the balance sheet effect and the income statement effect for FIFO versus LIFO.

Heathroton Company's goods in transit at December 31 include: Which items should be included in Heathroton's inventory at December 31?

Cost of goods available for sale is allocated to ______________ and cost of goods ____________.

The cost of goods available for sale is allocated to the cost of goods sold and the

Under the gross profit method, each of the following items are estimated except for the

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

If the unit cost of inventory has continuously increased, the , first-out cost flow method will result in a higher ending inventory cost than if the , first-out method had been used.

Cost of goods available for sale is allocated to __ and cost of goods .