Question 1

A firm's days' sales in inventory is computed by dividing 365 by its inventory turnover.

Accepted Answer

A) True 
 B)False

Question 2

A summary of inventory records for Carlton Company reveals the following:
  
During 2019, 35 units were sold at $600 per unit for total sales revenue of $21,000.
Compute cost of goods sold, gross profit, and the inventory balance for the current period under FIFO, LIFO, and weighted-average cost methods.

Accepted Answer

FIFO assumes that the first units purcha

Question 3

Just-in-case inventories create inventory carrying costs, which include insurance, and the cost of the capital invested in the inventory.

Accepted Answer

A) True 
 B)False

Question 4

A weighted-average approach to costing inventory most naturally fits operations that involve differentiated products of high unit value.

Accepted Answer

A) True 
 B)False

Question 5

Use the following inventory related information for Questions below
On September 1, the beginning inventory was 110 units at $50 each. Purchases and sales during September were:
  
-What is the cost of ending inventory for September if the periodic weighted-average costing alternative is used? (Round your answer to the nearest dollar)

Accepted Answer

A)  $ 966 
B)  $6,338 
C)  $5,363 
D)  $6,276 
A)  $ 966 
B)  $6,338 
C)  $5,363 
D)  $6,276

Question 6

Use the following information to answer Questions below
The following data represent the beginning inventory and, in the order of occurrence, the purchases and sales of McKensie Company for an operating period. 
  
-Assuming McKensie Company uses weighted-average (perpetual) inventory procedures, sale no. 1 is recorded as an entry to Cost of Goods Sold for:

Accepted Answer

A)  $990 
B)  $910 
C)  $900 
D)  $890 
E)  None of the above 
A)  $990 
B)  $910 
C)  $900 
D)  $890 
E)  None of the above

Question 7

Use the following inventory related information for Questions below:
Matt's Sporting Goods had the following inventory records for the month of January.
  
-Assuming the first in first out (FIFO) method is used, what is Matt's total Cost of Goods Sold for the month of January?

Accepted Answer

A)  $14,280 
B)  $14,270 
C)  $14,320 
D)  $14,300 
A)  $14,280 
B)  $14,270 
C)  $14,320 
D)  $14,300

Question 8

Assuming sales hold steady, which of the following actions would result in lowering income taxes for a company that uses the LIFO inventory method?

Accepted Answer

A)  Increasing sales prices 
B)  Buying extra inventory near the end of the year in an inflationary environment 
C)  Allowing the inventory quantity at year end to fall below beginning year levels 
D)  None of these. All would cause increasing taxes 
A)  Increasing sales prices 
B)  Buying extra inventory near the end of the year in an inflationary environment 
C)  Allowing the inventory quantity at year end to fall below beginning year levels 
D)  None of these. All would cause increasing taxes

Question 9

Under which method of inventory cost flows is the cost flow assumed to be in the reverse order in which the expenditures were made?

Accepted Answer

A)  First-in, first-out 
B)  Last-in, last-out 
C)  Average cost 
D)  Lower of cost or market 
A)  First-in, first-out 
B)  Last-in, last-out 
C)  Average cost 
D)  Lower of cost or market

Question 10

Benson Company uses the LIFO inventory costing method for both its tax reporting purposes and its financial reporting purposes. Benson's inventories are reported at $502 million on its balance sheet. In its footnotes, Benson Company is required to report the amount at which inventories would have been reported under FIFO method.
The difference between these two numbers is commonly referred to as what?

Accepted Answer

A)  LCM disclosures 
B)  LIFO holding gain 
C)  LIFO liquidation 
D)  LIFO reserve 
A)  LCM disclosures 
B)  LIFO holding gain 
C)  LIFO liquidation 
D)  LIFO reserve

Question 11

Clint Company and Black Company reported the following information in their financial statements, prior to their merger:
 
 To the closest hundredth, how much is the 2019 inventory turnover for Black Company?

Accepted Answer

A)  2.24 
B)  0.90 
C)  1.72 
D)  1.80 
A)  2.24 
B)  0.90 
C)  1.72 
D)  1.80

Question 12

Use the following information for Questions below
The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Newtown, Inc. for an operating period
  
-Assuming Newtown, Inc., uses LIFO perpetual inventory procedures, sale no. 2 is recorded as an entry to Cost of Goods Sold for:

Accepted Answer

A)  $576 
B)  $596 
C)  $620 
D)  $632 
E)  None of the above 
A)  $576 
B)  $596 
C)  $620 
D)  $632 
E)  None of the above

Question 13

When inventory quantities are maintained or increased during a period, the LIFO method prevents any part of the beginning inventory amount from becoming part of the period's cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 14

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Blunt, Inc., for an operating period. 
  
-Assuming Blunt, Inc., uses FIFO periodic inventory procedures, the ending inventory cost is:

Accepted Answer

A)  $420 
B)  $440 
C)  $280 
D)  $310 
E)  None of the above 
A)  $420 
B)  $440 
C)  $280 
D)  $310 
E)  None of the above

Question 15

At the beginning of the current period, SIic Industries has 150 units of a product with a unit cost of $160. The inventory records report the following transactions:
   During the current period, Slic sells 340 units.
Compute the cost of goods sold for the current period and the ending inventory balance for this product based on the following assumptions:
a. Slic uses the FIFO method.
b. Slic uses the LIFO method.
c. Slic uses the weighted-average cost method.

Accepted Answer

Ending inventory uni

Question 16

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Newtown, Inc. for an operating period. 
  
-Assuming Newtown, Inc., uses FIFO inventory procedures, the ending inventory cost is:

Accepted Answer

A)  $684 
B)  $696 
C)  $722 
D)  $740 
E)  None of the above 
A)  $684 
B)  $696 
C)  $722 
D)  $740 
E)  None of the above

Question 17

The following amounts and costs of platters were available for sale by San Antonio Ceramics during the year:
  
San Antonio Ceramics has 35 platters on hand at the end of the year. What is the dollar amount of inventory at the end of the year according to the weighted-average cost method?

Accepted Answer

A)  $4,960 
B)  $3,100 
C)  $1,732.50 
D)  $2,170 
A)  $4,960 
B)  $3,100 
C)  $1,732.50 
D)  $2,170

Question 18

Use the following information to answer Questions below
The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Fiskie, Inc., for an operating period. 
  
-Assuming Fiskie, Inc., uses FIFO perpetual inventory procedures, the ending inventory cost is:

Accepted Answer

A)  $1,488 
B)  $1,080 
C)  $1,200 
D)  $1,056 
E)  None of the above 
A)  $1,488 
B)  $1,080 
C)  $1,200 
D)  $1,056 
E)  None of the above

Question 19

Use the following data, determine the value of inventory under the lower of cost or net realizable value rule, applied on an individual item basis.

Accepted Answer

A)  $6,000 
B)  $5,200 
C)  $6,800 
D)  $6,700 
A)  $6,000 
B)  $5,200 
C)  $6,800 
D)  $6,700

Question 20

Use the following information to answer Questions below
The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Fiskie, Inc., for an operating period. 
  
-Assuming Fiskie, Inc., uses weighted-average (perpetual) inventory procedures, the ending inventory cost is:

Accepted Answer

A)  $1,248 
B)  $1,272 
C)  $1,128 
D)  $1,092 
E)  None of the above 
A)  $1,248 
B)  $1,272 
C)  $1,128 
D)  $1,092 
E)  None of the above

A firm's days' sales in inventory is computed by dividing 365 by its inventory turnover.

Just-in-case inventories create inventory carrying costs, which include insurance, and the cost of the capital invested in the inventory.

A weighted-average approach to costing inventory most naturally fits operations that involve differentiated products of high unit value.

Use the following inventory related information for Questions below: Matt's Sporting Goods had the following inventory records for the month of January. -Assuming the first in first out (FIFO) method is used, what is Matt's total Cost of Goods Sold for the month of January?

Assuming sales hold steady, which of the following actions would result in lowering income taxes for a company that uses the LIFO inventory method?

Under which method of inventory cost flows is the cost flow assumed to be in the reverse order in which the expenditures were made?

Clint Company and Black Company reported the following information in their financial statements, prior to their merger: To the closest hundredth, how much is the 2019 inventory turnover for Black Company?

When inventory quantities are maintained or increased during a period, the LIFO method prevents any part of the beginning inventory amount from becoming part of the period's cost of goods sold.

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Blunt, Inc., for an operating period. -Assuming Blunt, Inc., uses FIFO periodic inventory procedures, the ending inventory cost is:

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Newtown, Inc. for an operating period. -Assuming Newtown, Inc., uses FIFO inventory procedures, the ending inventory cost is:

The following amounts and costs of platters were available for sale by San Antonio Ceramics during the year: San Antonio Ceramics has 35 platters on hand at the end of the year. What is the dollar amount of inventory at the end of the year according to the weighted-average cost method?

Use the following information to answer Questions below The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Fiskie, Inc., for an operating period. -Assuming Fiskie, Inc., uses FIFO perpetual inventory procedures, the ending inventory cost is:

Use the following data, determine the value of inventory under the lower of cost or net realizable value rule, applied on an individual item basis.

Financial Accounting and Business Decisions

Processing Accounting Information

Accrual Basis of Accounting

Understanding Accounting Information

Internal Control and Cash

Receivables

Property, Plant and Equipment and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Appendix A: The Language of Accountants: Debits and Credits

Appendix B: Accounting for Investments and Consolidated Financial Statements

Appendix C: Accounting and the Time Value of Money

Filters

Exam 7: Inventory

A firm's days' sales in inventory is computed by dividing 365 by its inventory turnover.

Just-in-case inventories create inventory carrying costs, which include insurance, and the cost of the capital invested in the inventory.

A weighted-average approach to costing inventory most naturally fits operations that involve differentiated products of high unit value.

Use the following inventory related information for Questions below: Matt's Sporting Goods had the following inventory records for the month of January. -Assuming the first in first out (FIFO) method is used, what is Matt's total Cost of Goods Sold for the month of January?

Assuming sales hold steady, which of the following actions would result in lowering income taxes for a company that uses the LIFO inventory method?

Under which method of inventory cost flows is the cost flow assumed to be in the reverse order in which the expenditures were made?

Clint Company and Black Company reported the following information in their financial statements, prior to their merger: To the closest hundredth, how much is the 2019 inventory turnover for Black Company?

When inventory quantities are maintained or increased during a period, the LIFO method prevents any part of the beginning inventory amount from becoming part of the period's cost of goods sold.

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Blunt, Inc., for an operating period. -Assuming Blunt, Inc., uses FIFO periodic inventory procedures, the ending inventory cost is:

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Newtown, Inc. for an operating period. -Assuming Newtown, Inc., uses FIFO inventory procedures, the ending inventory cost is:

The following amounts and costs of platters were available for sale by San Antonio Ceramics during the year: San Antonio Ceramics has 35 platters on hand at the end of the year. What is the dollar amount of inventory at the end of the year according to the weighted-average cost method?

Use the following information to answer Questions below The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Fiskie, Inc., for an operating period. -Assuming Fiskie, Inc., uses FIFO perpetual inventory procedures, the ending inventory cost is:

Use the following data, determine the value of inventory under the lower of cost or net realizable value rule, applied on an individual item basis.

Financial Accounting and Business Decisions

Processing Accounting Information

Accrual Basis of Accounting

Understanding Accounting Information

Internal Control and Cash

Receivables

Property, Plant and Equipment and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Appendix A: The Language of Accountants: Debits and Credits

Appendix B: Accounting for Investments and Consolidated Financial Statements

Appendix C: Accounting and the Time Value of Money

Filters