Question 1

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-Work-in-process

Accepted Answer

A) Most recent purchases will be included in ending inventory. 
B) 1 - (Cost of goods sold Net sales). 
C) Purchase discounts not taken are included in inventory. 
D) Products that are not yet complete. 
E) Purchase discounts not taken are considered interest expense. 
A) Most recent purchases will be included in ending inventory. 
B) 1 - (Cost of goods sold Net sales). 
C) Purchase discounts not taken are included in inventory. 
D) Products that are not yet complete. 
E) Purchase discounts not taken are considered interest expense.

Question 2

The inventories disclosure note in the 2014 financial statements for SUPERVALU Inc., one of the largest grocery chains in the United States, included the following ($ in millions):

"Inventories are valued at the lower of cost or market. Substantially all of the Company's inventory consists of finished goods. As of February 22, 2014 and February 23, 2013, approximately 57 percent and 60 percent, respectively, of the Company's inventories were valued under the LIFO method. If the FIFO method had been used to determine cost of inventories for which the LIFO method is used, the Company's inventories would have been higher by approximately $202 and $211 as of February 22, 2014 and February 23, 2013, respectively."
Cost of goods sold for the fiscal year ended February 22, 2014 was $14,623 million.
Required:
If SUPERVALU had used FIFO for all of its LIFO inventories, what would its cost of goods sold have been for 2014?

Accepted Answer

Cost of goods sold for 2014 would have b

Question 3

Using the gross method, purchase discounts lost are:

Accepted Answer

A)  Included in purchases. 
B)  Added to accounts payable. 
C)  Included in interest expense. 
D)  Deducted from discount income. 
A)  Included in purchases. 
B)  Added to accounts payable. 
C)  Included in interest expense. 
D)  Deducted from discount income.

Question 4

Cinnamon Buns Co. (CBC) started 2018 with $52,000 of merchandise on hand. During 2018, $280,000 in merchandise was purchased on account with credit terms of 2/10, n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system. Assume instead that (a) freight costs were paid by the vendor, (b) no discounts were taken, and (c) the merchandise on hand at the beginning of 2018 was determined by a physical count that failed to realize that $10,000 of merchandise was being held on consignment for Frosting R Us Inc. 
-What is cost of goods available for sale, assuming CBC uses the gross method to record purchase discounts?

Accepted Answer

A)  $318,000. 
B)  $327,000. 
C)  $321,480. 
D)  $337,000. 
A)  $318,000. 
B)  $327,000. 
C)  $321,480. 
D)  $337,000.

Question 5

The largest expense on a retailer's income statement is typically:

Accepted Answer

A)  Salaries and wages. 
B)  Cost of goods sold. 
C)  Income tax expense. 
D)  Depreciation expense. 
A)  Salaries and wages. 
B)  Cost of goods sold. 
C)  Income tax expense. 
D)  Depreciation expense.

Question 6

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-F.o.b. shipping point

Accepted Answer

A) Not feasible for many types of products. 
B) Not required to correspond to actual product flow. 
C) Legal title passes when goods are delivered to common carrier. 
D) Legal title passes when goods arrive at customer location. 
E) Making sure goods in transit are properly accounted for. 
A) Not feasible for many types of products. 
B) Not required to correspond to actual product flow. 
C) Legal title passes when goods are delivered to common carrier. 
D) Legal title passes when goods arrive at customer location. 
E) Making sure goods in transit are properly accounted for.

Question 7

Inventory does not include:

Accepted Answer

A)  Materials used in the production of goods to be sold. 
B)  Assets intended to be sold in the normal course of business. 
C)  The cost of office equipment. 
D)  Assets currently in production for normal sales. 
A)  Materials used in the production of goods to be sold. 
B)  Assets intended to be sold in the normal course of business. 
C)  The cost of office equipment. 
D)  Assets currently in production for normal sales.

Question 8

The primary reason for the popularity of LIFO is that it:

Accepted Answer

A)  Provides better matching of physical flow and cost flow. 
B)  Saves income taxes currently. 
C)  Simplifies recordkeeping. 
D)  Provides a permanent reduction of income taxes. 
A)  Provides better matching of physical flow and cost flow. 
B)  Saves income taxes currently. 
C)  Simplifies recordkeeping. 
D)  Provides a permanent reduction of income taxes.

Question 9

Anthony Thomas Candies (ATC) reported the following financial data for 2018 and 2017:   
-ATC's gross profit ratio (rounded) in 2018 is:

Accepted Answer

A)  53.4%. 
B)  51.9%. 
C)  50.3%. 
D)  None of these answer choices are correct. 
A)  53.4%. 
B)  51.9%. 
C)  50.3%. 
D)  None of these answer choices are correct.

Question 10

Physical counts of inventory are never made with perpetual inventory systems.

Accepted Answer

A) True 
 B)False

Question 11

Tiger Inc. adopted dollar-value LIFO on January 1, 2018, when the inventory value was $360,000 and the cost index was 1.25. On December 31, 2018, the inventory was valued at year-end cost of $395,000 and the cost index was 1.30. Tiger would report a LIFO inventory of:

Accepted Answer

A)  $410,800. 
B)  $374,400. 
C)  $379,808. 
D)  $380,600. 
A)  $410,800. 
B)  $374,400. 
C)  $379,808. 
D)  $380,600.

Question 12

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2018. Missing information has been left blank.

Required: Compute the missing amounts.

-

Accepted Answer

The answer of The following information is taken from the...

Question 13

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-Consignment

Accepted Answer

A) Items sold are assumed to come from a mixture of goods acquired during the period. 
B) Goods are transferred to another party but title remains with transferor. 
C) Cost of goods available for sale less ending inventory. 
D) Items sold are assumed to be those acquired first. 
E) Items sold are assumed to be those acquired last. 
A) Items sold are assumed to come from a mixture of goods acquired during the period. 
B) Goods are transferred to another party but title remains with transferor. 
C) Cost of goods available for sale less ending inventory. 
D) Items sold are assumed to be those acquired first. 
E) Items sold are assumed to be those acquired last.

Question 14

The Tucson Corporation's fiscal year ends on December 31. Tucson determines inventory quantity by a physical count of inventory on hand at the close of business on December 31. The company's controller has asked for your help in deciding if the following items should be included in the year-end inventory count.
1. Goods purchased from a vendor shipped f.o.b. shipping point on December 24 that arrived on January 4.
2. Goods shipped f.o.b. shipping point on December 27 arrived at the customer's location on January 4.
3. Goods purchased from a vendor shipped f.o.b. destination on December 27 that arrived on January 5.
4. Freight charges on goods purchased in 1.
5. Merchandise held on consignment for Masterwear, Inc.
6. Goods shipped f.o.b. destination on December 29 that arrived at the customer's location on January 2.
Required:
Determine if each of the six items above should be included or excluded from the company's year-end inventory.

Accepted Answer

1. Included.
2. Excl

Question 15

Northwest Fur Co. started 2018 with $94,000 of merchandise inventory on hand. During 2018, $400,000 in merchandise was purchased on account with credit terms of 1/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $7,500. Merchandise with an invoice amount of $5,000 was returned for credit. Cost of goods sold for the year was $380,000. Northwest uses a perpetual inventory system. 
-What is ending inventory assuming Northwest uses the gross method to record purchases?

Accepted Answer

A)  $112,490. 
B)  $112,550. 
C)  $116,500. 
D)  $120,300. 
A)  $112,490. 
B)  $112,550. 
C)  $116,500. 
D)  $120,300.

Question 16

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

Accepted Answer

A)  FIFO. 
B)  LIFO. 
C)  Weighted average. 
D)  None of these answer choices are correct. 
A)  FIFO. 
B)  LIFO. 
C)  Weighted average. 
D)  None of these answer choices are correct.

Question 17

Listed below are 10 terms, followed by a list of phrases that describe or characterize the terms. Match each phrase with the correct term.
-Periodic inventory system

Accepted Answer

A) Goods are transferred to another company but title remains with transferor. 
B) Items sold are those acquired first. 
C) Items sold are those acquired last. 
D) Inventory is viewed as a quantity of value. 
E) Legal title passes when goods arrive at customer location.
F)Items sold come from a mixture of goods acquired during the period.
G)Continuously records changes in inventory.
H)Legal title passes when goods are delivered to common carrier.
I)Adjusts inventory at the end of the period.
J)If LIFO is used for income tax purposes, it must be used for financial reporting. 
A) Goods are transferred to another company but title remains with transferor. 
B) Items sold are those acquired first. 
C) Items sold are those acquired last. 
D) Inventory is viewed as a quantity of value. 
E) Legal title passes when goods arrive at customer location.
F)Items sold come from a mixture of goods acquired during the period.
G)Continuously records changes in inventory.
H)Legal title passes when goods are delivered to common carrier.
I)Adjusts inventory at the end of the period.
J)If LIFO is used for income tax purposes, it must be used for financial reporting.

Question 18

-Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses LIFO and a perpetual inventory system.

Accepted Answer

Perpetual

Question 19

-Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses LIFO and perpetual inventory system.

Accepted Answer

The answer of  
-Required: Compute the January 31 ending...

Question 20

When reported in financial statements, a LIFO allowance account usually:

Accepted Answer

A)  Is shown in the firm's income statement. 
B)  Is added to LIFO cost to indicate what the inventory would cost on a FIFO basis. 
C)  Indicates the effect on income if LIFO were not used. 
D)  Shows the current rate of inflation for that asset. 
A)  Is shown in the firm's income statement. 
B)  Is added to LIFO cost to indicate what the inventory would cost on a FIFO basis. 
C)  Indicates the effect on income if LIFO were not used. 
D)  Shows the current rate of inflation for that asset.

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Work-in-process

Using the gross method, purchase discounts lost are:

The largest expense on a retailer's income statement is typically:

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -F.o.b. shipping point

Inventory does not include:

The primary reason for the popularity of LIFO is that it:

Anthony Thomas Candies (ATC) reported the following financial data for 2018 and 2017: -ATC's gross profit ratio (rounded) in 2018 is:

Physical counts of inventory are never made with perpetual inventory systems.

Tiger Inc. adopted dollar-value LIFO on January 1, 2018, when the inventory value was $360,000 and the cost index was 1.25. On December 31, 2018, the inventory was valued at year-end cost of $395,000 and the cost index was 1.30. Tiger would report a LIFO inventory of:

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2018. Missing information has been left blank. Required: Compute the missing amounts. -

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Consignment

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

Listed below are 10 terms, followed by a list of phrases that describe or characterize the terms. Match each phrase with the correct term. -Periodic inventory system

-Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses LIFO and a perpetual inventory system.

-Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses LIFO and perpetual inventory system.

When reported in financial statements, a LIFO allowance account usually:

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Revenue Recognition

Time Value of Money Concepts

Cash and Receivables

Inventories: Additional Issues

Property, Plant, and Equipment and Intangible Assets: Acquisition

Property, Plant, and Equipment and Intangible Assets: Utilization and Disposition

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes and Error Corrections

The Statement of Cash Flows Revisited

Filters

Exam 8: Inventories: Measurement

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Work-in-process

Using the gross method, purchase discounts lost are:

The largest expense on a retailer's income statement is typically:

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -F.o.b. shipping point

Inventory does not include:

The primary reason for the popularity of LIFO is that it:

Anthony Thomas Candies (ATC) reported the following financial data for 2018 and 2017: -ATC's gross profit ratio (rounded) in 2018 is:

Physical counts of inventory are never made with perpetual inventory systems.

Tiger Inc. adopted dollar-value LIFO on January 1, 2018, when the inventory value was $360,000 and the cost index was 1.25. On December 31, 2018, the inventory was valued at year-end cost of $395,000 and the cost index was 1.30. Tiger would report a LIFO inventory of:

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2018. Missing information has been left blank. Required: Compute the missing amounts. -

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Consignment

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

Listed below are 10 terms, followed by a list of phrases that describe or characterize the terms. Match each phrase with the correct term. -Periodic inventory system

-Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses LIFO and a perpetual inventory system.

-Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses LIFO and perpetual inventory system.

When reported in financial statements, a LIFO allowance account usually:

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Revenue Recognition

Time Value of Money Concepts

Cash and Receivables

Inventories: Additional Issues

Property, Plant, and Equipment and Intangible Assets: Acquisition

Property, Plant, and Equipment and Intangible Assets: Utilization and Disposition

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes and Error Corrections

The Statement of Cash Flows Revisited

Filters