Question 1

Which is NOT an assurance of footnote disclosures?

Accepted Answer

A) Conservative information 
B) Reliable information 
C) Comparable information 
D) Relevant information 
A) Conservative information 
B) Reliable information 
C) Comparable information 
D) Relevant information

Question 2

Shrinkage refers to the loss of inventory due to theft, damage or other similar occurrences.

Accepted Answer

A) True 
 B)False

Question 3

The various inventory costing methods will still produce the same cost of goods sold value.

Accepted Answer

A) True 
 B)False

Question 4

Customer demand for an item CANNOT:

Accepted Answer

A) increase the inventory turnover. 
B) decrease the inventory turnover. 
C) affect the amount of merchandise the company purchases. 
D) change the formula used to calculate inventory turnover. 
A) increase the inventory turnover. 
B) decrease the inventory turnover. 
C) affect the amount of merchandise the company purchases. 
D) change the formula used to calculate inventory turnover.

Question 5

Lionworks Enterprises had the following inventory data:  
Assuming average cost, what is the cost of goods sold for the July 7 sale? (Round any intermediary calculations to the nearest cent and round your final answer to the nearest dollar.)

Accepted Answer

A) $660 
B) $684 
C) $672 
D) $666 
A) $660 
B) $684 
C) $672 
D) $666

Question 6

A method of valuing inventory based on the costs for each individual item is called the:

Accepted Answer

A) LIFO method. 
B) average cost method. 
C) specific identification method. 
D) FIFO method. 
A) LIFO method. 
B) average cost method. 
C) specific identification method. 
D) FIFO method.

Question 7

Under the FIFO method, the flow of costs through the accounting records will:

Accepted Answer

A) be nearly 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. 
A) be nearly 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.

Question 8

Which of the following is often used when taking a physical inventory?

Accepted Answer

A) Pre-numbered count sheets 
B) Tags to show what inventory has been counted 
C) Maps of the location of the inventory 
D) All of the above 
A) Pre-numbered count sheets 
B) Tags to show what inventory has been counted 
C) Maps of the location of the inventory 
D) All of the above

Question 9

Liberty, Inc. has the following list of inventory:  
Under specific-identification, what is Liberty's ending inventory if ICF and CRD are not sold during the current period?

Accepted Answer

A) $34,294 
B) $40,643 
C) $34,023 
D) $51,409 
A) $34,294 
B) $40,643 
C) $34,023 
D) $51,409

Question 10

The inventory system that uses the merchandise inventory account as an active account is called the:

Accepted Answer

A) periodic system. 
B) perpetual system. 
C) LIFO system. 
D) FIFO system. 
A) periodic system. 
B) perpetual system. 
C) LIFO system. 
D) FIFO system.

Question 11

Footnotes are used with what concept or principle of accounting?

Accepted Answer

A) Conservatism 
B) Consistency 
C) Materiality 
D) Full disclosure 
A) Conservatism 
B) Consistency 
C) Materiality 
D) Full disclosure

Question 12

GAAP allows two different kinds of inventory costing methods.

Accepted Answer

A) True 
 B)False

Question 13

Lionworks Enterprises had the following inventory data:  
Assuming LIFO, what is the cost of goods sold for the July 7 sale? (Round your final answer to the nearest dollar.)

Accepted Answer

A) $628 
B) $632 
C) $636 
D) $626 
A) $628 
B) $632 
C) $636 
D) $626

Question 14

If the inventory shows an actual count of $405 and the perpetual inventory according to the records shows $420, the adjusting entry for the $15 would:

Accepted Answer

A) debit Cost of Goods Sold; credit Inventory. 
B) debit Cost of Goods Sold; credit Purchase Returns and Allowances. 
C) debit Inventory; credit Cost of Goods Sold. 
D) debit Inventory; credit Purchase Returns and Allowances. 
A) debit Cost of Goods Sold; credit Inventory. 
B) debit Cost of Goods Sold; credit Purchase Returns and Allowances. 
C) debit Inventory; credit Cost of Goods Sold. 
D) debit Inventory; credit Purchase Returns and Allowances.

Question 15

The journal entries to record the purchases of inventory on account are different based on the costing method chosen.

Accepted Answer

A) True 
 B)False

Which is NOT an assurance of footnote disclosures?

Shrinkage refers to the loss of inventory due to theft, damage or other similar occurrences.

The various inventory costing methods will still produce the same cost of goods sold value.

Customer demand for an item CANNOT:

Lionworks Enterprises had the following inventory data: Assuming average cost, what is the cost of goods sold for the July 7 sale? (Round any intermediary calculations to the nearest cent and round your final answer to the nearest dollar.)

A method of valuing inventory based on the costs for each individual item is called the:

Under the FIFO method, the flow of costs through the accounting records will:

Which of the following is often used when taking a physical inventory?

Liberty, Inc. has the following list of inventory: Under specific-identification, what is Liberty's ending inventory if ICF and CRD are not sold during the current period?

The inventory system that uses the merchandise inventory account as an active account is called the:

Footnotes are used with what concept or principle of accounting?

GAAP allows two different kinds of inventory costing methods.

Lionworks Enterprises had the following inventory data: Assuming LIFO, what is the cost of goods sold for the July 7 sale? (Round your final answer to the nearest dollar.)

If the inventory shows an actual count of $405 and the perpetual inventory according to the records shows $420, the adjusting entry for the $15 would:

The journal entries to record the purchases of inventory on account are different based on the costing method chosen.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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Exam 5: Inventory

Which is NOT an assurance of footnote disclosures?

Shrinkage refers to the loss of inventory due to theft, damage or other similar occurrences.

The various inventory costing methods will still produce the same cost of goods sold value.

Customer demand for an item CANNOT:

Lionworks Enterprises had the following inventory data: Assuming average cost, what is the cost of goods sold for the July 7 sale? (Round any intermediary calculations to the nearest cent and round your final answer to the nearest dollar.)

A method of valuing inventory based on the costs for each individual item is called the:

Under the FIFO method, the flow of costs through the accounting records will:

Which of the following is often used when taking a physical inventory?

Liberty, Inc. has the following list of inventory: Under specific-identification, what is Liberty's ending inventory if ICF and CRD are not sold during the current period?

The inventory system that uses the merchandise inventory account as an active account is called the:

Footnotes are used with what concept or principle of accounting?

GAAP allows two different kinds of inventory costing methods.

Lionworks Enterprises had the following inventory data: Assuming LIFO, what is the cost of goods sold for the July 7 sale? (Round your final answer to the nearest dollar.)

If the inventory shows an actual count of $405 and the perpetual inventory according to the records shows $420, the adjusting entry for the $15 would:

The journal entries to record the purchases of inventory on account are different based on the costing method chosen.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters