Question 1

An accounting department only needs to know:

Accepted Answer

A)  how many units were sold, not which units were sold. 
B)  which units were sold, not how many units were sold. 
C)  the specific price of a specific unit. 
D)  the average price of a specific unit. 
E)  the physical flow of goods. 
A)  how many units were sold, not which units were sold. 
B)  which units were sold, not how many units were sold. 
C)  the specific price of a specific unit. 
D)  the average price of a specific unit. 
E)  the physical flow of goods. A

Question 2

The second step in using the gross profit method to estimate ending inventory is to:

Accepted Answer

A)  estimate the cost of goods sold. 
B)  calculate the cost of goods available for sale. 
C)  estimate the ending inventory. 
D)  estimate the beginning inventory. 
E)  estimate net income. 
A)  estimate the cost of goods sold. 
B)  calculate the cost of goods available for sale. 
C)  estimate the ending inventory. 
D)  estimate the beginning inventory. 
E)  estimate net income. A

Question 3

Inventory errors cancel out at the end of the________ accounting period(s).

Accepted Answer

A)  1st 
B)  2nd 
C)  3rd 
D)  4th 
E)  5th 
A)  1st 
B)  2nd 
C)  3rd 
D)  4th 
E)  5th B

Question 4

Under the specific-identification method, the flow of goods through the accounting records will:

Accepted Answer

A)  be the opposite of the physical flow of goods through the business. 
B)  closely match the physical flow of goods through the business. 
C)  exactly match the physical flow of goods through the business. 
D)  have no relationship to the physical flow of goods through the business. 
E)  sometimes match the physical flow of goods through the business. 
A)  be the opposite of the physical flow of goods through the business. 
B)  closely match the physical flow of goods through the business. 
C)  exactly match the physical flow of goods through the business. 
D)  have no relationship to the physical flow of goods through the business. 
E)  sometimes match the physical flow of goods through the business.

Question 5

If Period 1 ending inventory is understated, then what items are affected on the income statement? Indicate whether the item would be understated or overstated

Accepted Answer

Cost of goods sold i

Question 6

If ending inventory in Period 1 is understated, cost of goods sold in Period 2 is __________.

Accepted Answer

The answer of If ending inventory in Period 1 is...

Question 7

What can a poor or declining inventory turnover tell you?

Accepted Answer

It may indicate that

Question 8

Compare the effects of the different costing methods on the financial statements
-What is the most popular inventory costing method?

Accepted Answer

The answer of Compare the effects of the different costing...

Question 9

The inventory turnover rate is computed by:

Accepted Answer

A)  dividing average inventory by cost of goods sold. 
B)  dividing cost of goods sold by average inventory. 
C)  dividing ending inventory by cost of goods sold. 
D)  dividing ending inventory by beginning inventory. 
E)  dividing beginning inventory by cost of goods sold. 
A)  dividing average inventory by cost of goods sold. 
B)  dividing cost of goods sold by average inventory. 
C)  dividing ending inventory by cost of goods sold. 
D)  dividing ending inventory by beginning inventory. 
E)  dividing beginning inventory by cost of goods sold.

Question 10

A manufacturer uses __________ inventory to produce the goods it sells.

Accepted Answer

The answer of A manufacturer uses __________ inventory to produce...

Question 11

What is the term called that describes the decrease in inventory due to employee theft, customer theft,
and the damage, spillage, or spoilage of inventory items?

Accepted Answer

The answer of What is the term called that describes...

Question 12

Compare the effects of the different costing methods on the financial statements
-What are the benefits of using FIFO?

Accepted Answer

FIFO most closely ma

Question 13

An error in the reported inventory will cause errors in all of the following EXCEPT the:

Accepted Answer

A)  balance sheet. 
B)  statement of retained earnings. 
C)  following year's financial statements. 
D)  cash account. 
E)  income statement. 
A)  balance sheet. 
B)  statement of retained earnings. 
C)  following year's financial statements. 
D)  cash account. 
E)  income statement.

Question 14

If a company experiences a loss of inventory for fire, there is no way to estimate the inventory.

Accepted Answer

A) True 
 B)False

Question 15

Compare the effects of the different costing methods on the financial statements
-In periods of ricing prices, the average cost method generates gross profit, net income, and income tax amounts that fall below the FIFO method.

Accepted Answer

A) True 
 B)False

Question 16

Beginning inventory plus net purchases equals cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 17

When using the LCNRV rule, is the calculation of ending inventory applied to inventory on an item-by-item basis or as a whole?

Accepted Answer

on an item

Question 18

Beta Corporation has given you the following inventory figures:
   
Using the gross profit method, calculate the estimated ending inventory to the nearest dollar. Show all calculations.

Accepted Answer

$372,179
Calculation:
Goods available fo

Question 19

Gross profit is $40,000; beginning inventory is $16,500; ending inventory is $20,800; and sales are $120,000. The industry average has an inventory turnover of 4.8. How is the company doing with its inventory management as compared to the industry?

Accepted Answer

Inventory turnover = (120,000 - 40,000)

Question 20

Under the conservatism principle, liabilities and expenses would be overstated, rather than understated.

Accepted Answer

A) True 
 B)False

An accounting department only needs to know:

The second step in using the gross profit method to estimate ending inventory is to:

Inventory errors cancel out at the end of the________ accounting period(s).

Under the specific-identification method, the flow of goods through the accounting records will:

If Period 1 ending inventory is understated, then what items are affected on the income statement? Indicate whether the item would be understated or overstated

If ending inventory in Period 1 is understated, cost of goods sold in Period 2 is __________.

What can a poor or declining inventory turnover tell you?

Compare the effects of the different costing methods on the financial statements -What is the most popular inventory costing method?

The inventory turnover rate is computed by:

A manufacturer uses __________ inventory to produce the goods it sells.

What is the term called that describes the decrease in inventory due to employee theft, customer theft, and the damage, spillage, or spoilage of inventory items?

Compare the effects of the different costing methods on the financial statements -What are the benefits of using FIFO?

An error in the reported inventory will cause errors in all of the following EXCEPT the:

If a company experiences a loss of inventory for fire, there is no way to estimate the inventory.

Compare the effects of the different costing methods on the financial statements -In periods of ricing prices, the average cost method generates gross profit, net income, and income tax amounts that fall below the FIFO method.

Beginning inventory plus net purchases equals cost of goods sold.

When using the LCNRV rule, is the calculation of ending inventory applied to inventory on an item-by-item basis or as a whole?

Beta Corporation has given you the following inventory figures: Using the gross profit method, calculate the estimated ending inventory to the nearest dollar. Show all calculations.

Gross profit is $40,000; beginning inventory is $16,500; ending inventory is $20,800; and sales are $120,000. The industry average has an inventory turnover of 4.8. How is the company doing with its inventory management as compared to the industry?

Under the conservatism principle, liabilities and expenses would be overstated, rather than understated.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Ethics, Internal Control, and Cash

Accounting for a Merchandising Business

Sales and Receivables

Long-Term Assets

Current Liabilities and Long-Term Debt

Corporations: Share Capital and Retained Earnings

The Cash Flow Statement

Financial Statement Analysis

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Exam 6: Inventory

An accounting department only needs to know:

The second step in using the gross profit method to estimate ending inventory is to:

Inventory errors cancel out at the end of the________ accounting period(s).

Under the specific-identification method, the flow of goods through the accounting records will:

If Period 1 ending inventory is understated, then what items are affected on the income statement? Indicate whether the item would be understated or overstated

If ending inventory in Period 1 is understated, cost of goods sold in Period 2 is __________.

What can a poor or declining inventory turnover tell you?

Compare the effects of the different costing methods on the financial statements -What is the most popular inventory costing method?

The inventory turnover rate is computed by:

A manufacturer uses __________ inventory to produce the goods it sells.

What is the term called that describes the decrease in inventory due to employee theft, customer theft, and the damage, spillage, or spoilage of inventory items?

Compare the effects of the different costing methods on the financial statements -What are the benefits of using FIFO?

An error in the reported inventory will cause errors in all of the following EXCEPT the:

If a company experiences a loss of inventory for fire, there is no way to estimate the inventory.

Compare the effects of the different costing methods on the financial statements -In periods of ricing prices, the average cost method generates gross profit, net income, and income tax amounts that fall below the FIFO method.

Beginning inventory plus net purchases equals cost of goods sold.

When using the LCNRV rule, is the calculation of ending inventory applied to inventory on an item-by-item basis or as a whole?

Beta Corporation has given you the following inventory figures: Using the gross profit method, calculate the estimated ending inventory to the nearest dollar. Show all calculations.

Gross profit is $40,000; beginning inventory is $16,500; ending inventory is $20,800; and sales are $120,000. The industry average has an inventory turnover of 4.8. How is the company doing with its inventory management as compared to the industry?

Under the conservatism principle, liabilities and expenses would be overstated, rather than understated.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Ethics, Internal Control, and Cash

Accounting for a Merchandising Business

Sales and Receivables

Long-Term Assets

Current Liabilities and Long-Term Debt

Corporations: Share Capital and Retained Earnings

The Cash Flow Statement

Financial Statement Analysis

Filters