Question 1

Generally,which inventory costing method approximates most closely the current cost for each of the following?

Accepted Answer

The answer of Generally,which inventory costing method approximates most closely...

Question 2

Lexington Company updates its inventory periodically.The company's beginning inventory was $1,000 and purchases were $5,000 during the year.The company's ending inventory count was $2,000.What was the amount of its cost of goods sold?

Accepted Answer

A)  $6,000 
B)  $4,000 
C)  $8,000 
D)  $2,000 
A)  $6,000 
B)  $4,000 
C)  $8,000 
D)  $2,000

Question 3

Which of the following would cause the greatest increase in a company's inventory turnover ratio?

Accepted Answer

A)  Keeping the same amount of inventory on hand while unit sales are increasing 
B)  Increasing the amount of inventory on hand while unit sales are increasing 
C)  Keeping the same amount of inventory on hand while unit sales are decreasing 
D)  Decreasing the amount of inventory on hand while unit sales are increasing 
A)  Keeping the same amount of inventory on hand while unit sales are increasing 
B)  Increasing the amount of inventory on hand while unit sales are increasing 
C)  Keeping the same amount of inventory on hand while unit sales are decreasing 
D)  Decreasing the amount of inventory on hand while unit sales are increasing

Question 4

When a company sells goods,it removes their cost from the Inventory account and reports the cost on the income statement as Selling Expense

Accepted Answer

A) True 
 B)False

Question 5

Angus Company agreed to sell goods for Longhorn Company on consignment,but wasn't willing to take ownership of the goods in case they were difficult to sell.Which of the following statements is true?

Accepted Answer

A)  Angus owns the inventory and should report it on its balance sheet. 
B)  Longhorn owns the inventory, but should not report it on its balance sheet because Angus actually holds the inventory. 
C)  Angus owns the inventory, since possession is nineteenths of the law, but should not report it on its balance sheet. 
D)  Longhorn owns the inventory and should report it on its balance sheet. 
A)  Angus owns the inventory and should report it on its balance sheet. 
B)  Longhorn owns the inventory, but should not report it on its balance sheet because Angus actually holds the inventory. 
C)  Angus owns the inventory, since possession is nineteenths of the law, but should not report it on its balance sheet. 
D)  Longhorn owns the inventory and should report it on its balance sheet.

Question 6

Bailey Company uses a periodic inventory system and its inventory records contain the following information:
   
The company sold 1,000 units during June.There were no additional purchases or sales during the remainder of the year.The company had 500 units were in its ending inventory at the end of the year.
-Use the information above to answer the following question.If Bailey Company uses the FIFO costing method,what is the cost of its ending inventory?

Accepted Answer

A)  $1,494 
B)  $2,290 
C)  $2,580 
D)  $2,706 
A)  $1,494 
B)  $2,290 
C)  $2,580 
D)  $2,706

Question 7

Delta Diamonds uses a periodic inventory system.The company had five one-carat diamonds available for sale this year: one was purchased on June 1 for $500,two were purchased on July 9 for $550 each,and two were purchased on September 23 for $600 each.On December 24,it sold one of the diamonds that was purchased on July 9.Using the LIFO method,its ending inventory (after the December 24 sale)equals:

Accepted Answer

A)  $2, 300. 
B)  $2, 250. 
C)  $600. 
D)  $2,200. 
A)  $2, 300. 
B)  $2, 250. 
C)  $600. 
D)  $2,200.

Question 8

Which of the following kinds of inventory would be the best suited for the specific identification method?

Accepted Answer

A)  Canned fruit 
B)  Custom made yachts 
C)  Baseball bats 
D)  Cattle feed 
A)  Canned fruit 
B)  Custom made yachts 
C)  Baseball bats 
D)  Cattle feed

Question 9

A company had been selling its product for $20 per unit,but recently lowered the selling price to $15 per unit.The company's current inventory consists of 200 units purchased at $16 per unit.The market value of this inventory is currently $13 per unit.At what amount should the company's inventory be reported on the balance sheet?

Accepted Answer

A)  $2,600 
B)  $3,200 
C)  $3,000 
D)  $4,000 
A)  $2,600 
B)  $3,200 
C)  $3,000 
D)  $4,000

Question 10

Thompson Company updates its inventory records perpetually.The company's records showed a beginning inventory of $600,cost of goods sold of $1,400,and ending inventory of $800.How much inventory was purchased during the year?

Accepted Answer

A)  $1,200 
B)  $1,000 
C)  $900 
D)  $1,600 
A)  $1,200 
B)  $1,000 
C)  $900 
D)  $1,600

Question 11

If companies are required to adopt IFRS,companies will:

Accepted Answer

A)  no longer be able to use FIFO. 
B)  have to switch to FIFO. 
C)  have to switch to weighted average cost. 
D)  no longer be able to use LIFO. 
A)  no longer be able to use FIFO. 
B)  have to switch to FIFO. 
C)  have to switch to weighted average cost. 
D)  no longer be able to use LIFO.

Question 12

Alphabet Company, which uses the periodic inventory method, purchases different letters for resale.Alphabet had no beginning inventory.It purchased A thru G in January at $4 per letter.In February, it purchased H thru L at $6 per letter.It purchased M thru R in March at $7 per letter.It sold A, D, E, H, J and N in October.There were no additional purchases or sales during the remainder of the year.
-Use the information above to answer the following question.If Alphabet Company uses the LIFO method,what is the cost of its ending inventory?

Accepted Answer

A)  $24 
B)  $42 
C)  $58 
D)  $76 
A)  $24 
B)  $42 
C)  $58 
D)  $76

Question 13

Goods that a company holds that are not reported on the company's balance sheet are called:

Accepted Answer

A)  finished goods. 
B)  consignment inventory. 
C)  raw materials. 
D)  work in process. 
A)  finished goods. 
B)  consignment inventory. 
C)  raw materials. 
D)  work in process.

Question 14

-AAA Co.uses a periodic inventory system and has the following information in regard to its inventory:
 
There are 500 units in ending inventory.What is the amount of the ending inventory using the LIFO method?

Accepted Answer

A)  $3,000 
B)  $7,200 
C)  $7,800 
D)  $8,900 
A)  $3,000 
B)  $7,200 
C)  $7,800 
D)  $8,900

Question 15

A company reported the following data:
   
 
Required:
Part a.Calculate the company's inventory turnover for each of the three years.(Round your answers to two decimal points.)
Part b.Calculate the days to sell for each of the three years.(Round your answers to one decimal point.)
Part c.Comment on the company's inventory turnover ratio by describing what it measures,how the changes over the past three years can be interpreted,and what may have caused those changes.
Part d.Comment on the company's days to sell by describing what it measures and how the changes over the past three years can be interpreted.

Accepted Answer

Part a
Inventory turnover ratio = Cost o

Question 16

Your company sells $469,300 of goods during the year that have a cost of $398,600.Inventory was $29,783 at the beginning of the year and $34,038 at the end of the year.
-Use the information above to answer the following question.How long on average does it take to sell something from inventory after it is purchased?

Accepted Answer

A)  12.5 days 
B)  24.8 days 
C)  29.2 days 
D)  165.9 days 
A)  12.5 days 
B)  24.8 days 
C)  29.2 days 
D)  165.9 days

Question 17

Inventory is reported on the balance sheet as a current asset.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following actions would most likely cause the inventory turnover ratio to increase?

Accepted Answer

A)  Increasing the average inventory kept on hand. 
B)  Maintaining the same average inventory kept on hand and increasing the volume of sales. 
C)  Increasing the average inventory kept on hand and increasing the volume of sales. 
D)  Maintaining the same average inventory kept on hand and decreasing the volume of sales. 
A)  Increasing the average inventory kept on hand. 
B)  Maintaining the same average inventory kept on hand and increasing the volume of sales. 
C)  Increasing the average inventory kept on hand and increasing the volume of sales. 
D)  Maintaining the same average inventory kept on hand and decreasing the volume of sales.

Question 19

AAA Co.uses a periodic inventory system and has the following information in regard to its inventory:
 
There are 500 units in ending inventory.What is the amount of the ending inventory using the FIFO method?

Accepted Answer

A)  $3,000 
B)  $7,200 
C)  $7,800 
D)  $8,900 
A)  $3,000 
B)  $7,200 
C)  $7,800 
D)  $8,900

Question 20

Mansfield Company has a periodic inventory system and uses the LIFO method to assign costs to inventory and cost of goods sold.Consider the following information:
 
What amounts would be reported as the cost of goods sold and ending inventory balances for the period?

Accepted Answer

A)  Cost of goods sold $625; Ending inventory $175 
B)  Cost of goods sold $755; Ending inventory $225 
C)  Cost of goods sold $550; Ending inventory $250 
D)  Cost of goods sold $600; Ending inventory $200 
A)  Cost of goods sold $625; Ending inventory $175 
B)  Cost of goods sold $755; Ending inventory $225 
C)  Cost of goods sold $550; Ending inventory $250 
D)  Cost of goods sold $600; Ending inventory $200

Generally,which inventory costing method approximates most closely the current cost for each of the following?

Lexington Company updates its inventory periodically.The company's beginning inventory was $1,000 and purchases were $5,000 during the year.The company's ending inventory count was $2,000.What was the amount of its cost of goods sold?

Which of the following would cause the greatest increase in a company's inventory turnover ratio?

When a company sells goods,it removes their cost from the Inventory account and reports the cost on the income statement as Selling Expense

Angus Company agreed to sell goods for Longhorn Company on consignment,but wasn't willing to take ownership of the goods in case they were difficult to sell.Which of the following statements is true?

Which of the following kinds of inventory would be the best suited for the specific identification method?

Thompson Company updates its inventory records perpetually.The company's records showed a beginning inventory of $600,cost of goods sold of $1,400,and ending inventory of $800.How much inventory was purchased during the year?

If companies are required to adopt IFRS,companies will:

Goods that a company holds that are not reported on the company's balance sheet are called:

-AAA Co.uses a periodic inventory system and has the following information in regard to its inventory: There are 500 units in ending inventory.What is the amount of the ending inventory using the LIFO method?

Inventory is reported on the balance sheet as a current asset.

Which of the following actions would most likely cause the inventory turnover ratio to increase?

AAA Co.uses a periodic inventory system and has the following information in regard to its inventory: There are 500 units in ending inventory.What is the amount of the ending inventory using the FIFO method?

Mansfield Company has a periodic inventory system and uses the LIFO method to assign costs to inventory and cost of goods sold.Consider the following information: What amounts would be reported as the cost of goods sold and ending inventory balances for the period?

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

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Exam 7: Reporting and Interpreting Inventories and Cost of Goods Sold

Generally,which inventory costing method approximates most closely the current cost for each of the following?

Lexington Company updates its inventory periodically.The company's beginning inventory was $1,000 and purchases were $5,000 during the year.The company's ending inventory count was $2,000.What was the amount of its cost of goods sold?

Which of the following would cause the greatest increase in a company's inventory turnover ratio?

When a company sells goods,it removes their cost from the Inventory account and reports the cost on the income statement as Selling Expense

Angus Company agreed to sell goods for Longhorn Company on consignment,but wasn't willing to take ownership of the goods in case they were difficult to sell.Which of the following statements is true?

Which of the following kinds of inventory would be the best suited for the specific identification method?

Thompson Company updates its inventory records perpetually.The company's records showed a beginning inventory of $600,cost of goods sold of $1,400,and ending inventory of $800.How much inventory was purchased during the year?

If companies are required to adopt IFRS,companies will:

Goods that a company holds that are not reported on the company's balance sheet are called:

-AAA Co.uses a periodic inventory system and has the following information in regard to its inventory: There are 500 units in ending inventory.What is the amount of the ending inventory using the LIFO method?

Inventory is reported on the balance sheet as a current asset.

Which of the following actions would most likely cause the inventory turnover ratio to increase?

AAA Co.uses a periodic inventory system and has the following information in regard to its inventory: There are 500 units in ending inventory.What is the amount of the ending inventory using the FIFO method?

Mansfield Company has a periodic inventory system and uses the LIFO method to assign costs to inventory and cost of goods sold.Consider the following information: What amounts would be reported as the cost of goods sold and ending inventory balances for the period?

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

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