Question 1

The choice of cost flow assumption (FIFO, LIFO, or average) does not depend on the actual physical flow of the product.

Accepted Answer

A) True 
 B)False

Question 2

Nueva Company reported the following pretax data for its first year of operations.   
-What is Nueva's net income if it elects FIFO?

Accepted Answer

A)  $440. 
B)  $264. 
C)  $620. 
D)  $372. 
A)  $440. 
B)  $264. 
C)  $620. 
D)  $372.

Question 3

Nu Company reported the following pretax data for its first year of operations.   
-What is Nu's net income if it elects LIFO?

Accepted Answer

A)  $288. 
B)  $144. 
C)  $240. 
D)  $480. 
A)  $288. 
B)  $144. 
C)  $240. 
D)  $480.

Question 4

Listed below are 10 terms, followed by a list of phrases that describe or characterize the terms. Match each phrase with the correct term.
-Perpetual 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 5

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 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.
-Cost of goods sold

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 7

Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition): 40 units at $100
70 units at $80
170 units at $60
Sales for the year totaled 270 units, leaving 10 units on hand at the end of the year.
-
In comparing the ending inventory balances of FIFO and LIFO, the ending inventory value under FIFO less the ending inventory balance under LIFO results in a difference of:

Accepted Answer

A)  $400. 
B)  $(400). 
C)  $0. 
D)  $50. 
A)  $400. 
B)  $(400). 
C)  $0. 
D)  $50.

Question 8

Patty's Pet Store purchased merchandise on October 10, 2018, at a price of $35,000, subject to credit terms of 2/10, n/30. Patty's uses the gross method for recording purchases and uses perpetual inventory system.
Required:
1. Prepare the journal entry to record the purchase.
2. Prepare the journal entry to record the payment of one-half the invoice amount on October 18, 2018.
3. Prepare the journal entry to record the payment of the balance of the amount due on November 8, 2018.

Accepted Answer

The answer of Patty's Pet Store purchased merchandise on October...

Question 9

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.
-LIFO liquidation

Accepted Answer

A) Units grouped according to similarities. 
B) Captured by FIFO for perishable products. 
C) Considered a product cost. 
D) Reduces the quality of current period earnings information. 
E) Continuously records changes in inventory. 
A) Units grouped according to similarities. 
B) Captured by FIFO for perishable products. 
C) Considered a product cost. 
D) Reduces the quality of current period earnings information. 
E) Continuously records changes in inventory.

Question 10

During periods when costs are rising and inventory quantities are stable, cost of goods sold will be:

Accepted Answer

A)  Higher under FIFO than LIFO. 
B)  Higher under FIFO than average cost. 
C)  Lower under average cost than LIFO. 
D)  Lower under LIFO than FIFO. 
A)  Higher under FIFO than LIFO. 
B)  Higher under FIFO than average cost. 
C)  Lower under average cost than LIFO. 
D)  Lower under LIFO than FIFO.

Question 11

A company that prepares its financial statements according to International Financial Reporting Standards (IFRS) can use all of the same inventory valuation methods as a company that prepares its statements under U.S. GAAP.

Accepted Answer

A) True 
 B)False

Question 12

LIFO usually provides a better match of revenue and expense than does FIFO.

Accepted Answer

A) True 
 B)False

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.
-FIFO

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 14

Selected financial statement data from Western Colorado Stores is shown below.   Required:
1. Compute the gross profit ratio for 2018.
2. Compute the inventory turnover ratio for 2018.

Accepted Answer

@#IMG-DLM& 1. Gross profit ratio = $125,

Question 15

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. destination

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 16

Inventory records for Herb's Chemicals revealed the following: March 1, 2018, inventory: 1,000 gallons @ $7.20 = $7,200   
-The ending inventory assuming FIFO is:

Accepted Answer

A)  $5,140. 
B)  $5,080. 
C)  $5,060. 
D)  $5,050. 
A)  $5,140. 
B)  $5,080. 
C)  $5,060. 
D)  $5,050.

Question 17

Costs and prices regularly fall every year in the microcomputer industry. Briefly indicate your recommendation and rationale for an inventory method for a firm about to enter this industry.

Accepted Answer

The choice of accounting methods is both

Question 18

Ending inventory is equal to the cost of items on hand plus:

Accepted Answer

A)  Items in transit sold f.o.b. shipping point. 
B)  Purchases in transit f.o.b. destination. 
C)  Items in transit sold f.o.b. destination. 
D)  None of these answer choices is correct. 
A)  Items in transit sold f.o.b. shipping point. 
B)  Purchases in transit f.o.b. destination. 
C)  Items in transit sold f.o.b. destination. 
D)  None of these answer choices is correct.

Question 19

Thompson TV and Appliance reported the following in its 2018 financial statements:   
-Thompson's 2018 inventory turnover ratio is:

Accepted Answer

A)  3.91. 
B)  4.00. 
C)  4.88. 
D)  5.00. 
A)  3.91. 
B)  4.00. 
C)  4.88. 
D)  5.00.

Question 20

LIFO liquidation profits occur when inventory quantity declines and costs are rising.

Accepted Answer

A) True 
 B)False

The choice of cost flow assumption (FIFO, LIFO, or average) does not depend on the actual physical flow of the product.

Nueva Company reported the following pretax data for its first year of operations. -What is Nueva's net income if it elects FIFO?

Nu Company reported the following pretax data for its first year of operations. -What is Nu's net income if it elects LIFO?

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

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. -Cost of goods sold

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. -LIFO liquidation

During periods when costs are rising and inventory quantities are stable, cost of goods sold will be:

A company that prepares its financial statements according to International Financial Reporting Standards (IFRS) can use all of the same inventory valuation methods as a company that prepares its statements under U.S. GAAP.

LIFO usually provides a better match of revenue and expense than does FIFO.

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. -FIFO

Selected financial statement data from Western Colorado Stores is shown below. Required: 1. Compute the gross profit ratio for 2018. 2. Compute the inventory turnover ratio for 2018.

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. destination

Inventory records for Herb's Chemicals revealed the following: March 1, 2018, inventory: 1,000 gallons @ $7.20 = $7,200 -The ending inventory assuming FIFO is:

Costs and prices regularly fall every year in the microcomputer industry. Briefly indicate your recommendation and rationale for an inventory method for a firm about to enter this industry.

Ending inventory is equal to the cost of items on hand plus:

Thompson TV and Appliance reported the following in its 2018 financial statements: -Thompson's 2018 inventory turnover ratio is:

LIFO liquidation profits occur when inventory quantity declines and costs are rising.

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

The choice of cost flow assumption (FIFO, LIFO, or average) does not depend on the actual physical flow of the product.

Nueva Company reported the following pretax data for its first year of operations. -What is Nueva's net income if it elects FIFO?

Nu Company reported the following pretax data for its first year of operations. -What is Nu's net income if it elects LIFO?

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

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. -Cost of goods sold

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. -LIFO liquidation

During periods when costs are rising and inventory quantities are stable, cost of goods sold will be:

A company that prepares its financial statements according to International Financial Reporting Standards (IFRS) can use all of the same inventory valuation methods as a company that prepares its statements under U.S. GAAP.

LIFO usually provides a better match of revenue and expense than does FIFO.

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. -FIFO

Selected financial statement data from Western Colorado Stores is shown below. Required: 1. Compute the gross profit ratio for 2018. 2. Compute the inventory turnover ratio for 2018.

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. destination

Inventory records for Herb's Chemicals revealed the following: March 1, 2018, inventory: 1,000 gallons @ $7.20 = $7,200 -The ending inventory assuming FIFO is:

Costs and prices regularly fall every year in the microcomputer industry. Briefly indicate your recommendation and rationale for an inventory method for a firm about to enter this industry.

Ending inventory is equal to the cost of items on hand plus:

Thompson TV and Appliance reported the following in its 2018 financial statements: -Thompson's 2018 inventory turnover ratio is:

LIFO liquidation profits occur when inventory quantity declines and costs are rising.

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