Question 1

Inventory is an example of a long-term asset.

Accepted Answer

A) True 
 B)False

Question 2

In general,when prices are rising,use of the FIFO method will result in a lower tax liability than the other methods.

Accepted Answer

A) True 
 B)False

Question 3

The specific identification method and the LIFO method produce the same results under both the perpetual and periodic inventory systems.

Accepted Answer

A) True 
 B)False

Question 4

Use this inventory information for the month of September to answer the following question.   Assuming that a perpetual inventory system is used,what is ending inventory (rounded)under the average-cost method?

Accepted Answer

A)  $3,666 
B)  $3,712 
C)  $3,208 
D)  $7,734 
A)  $3,666 
B)  $3,712 
C)  $3,208 
D)  $7,734

Question 5

Goods in transit shipped FOB destination should be included in the seller's ending inventory.

Accepted Answer

A) True 
 B)False

Question 6

During periods of consistently falling prices,the FIFO inventory method will produce the highest possible amount of net income.

Accepted Answer

A) True 
 B)False

Question 7

Average inventory equals $200,000,and cost of goods sold equals $432,000.Inventory turnover equals

Accepted Answer

A)  0.46 times. 
B)  1.23 times. 
C)  2.16 times. 
D)  168.98 times. 
A)  0.46 times. 
B)  1.23 times. 
C)  2.16 times. 
D)  168.98 times.

Question 8

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Accepted Answer

A) True 
 B)False

Question 9

Merchandise inventory is always valued on the balance sheet at its historical cost.

Accepted Answer

A) True 
 B)False

Question 10

Braxton Company uses the retail method to estimate the cost of ending inventory.Use the following information to estimate the cost of Braxton's ending inventory on December 31,2013,using the retail method.Show your answer in good form.

Accepted Answer

The answer of Braxton Company uses the retail method to...

Question 11

During the first quarter of the year,Blake Company sold 12,000 cases of Product T for $120,000.Facts related to its beginning inventory and purchases are as follows:
   For the quarter ended March 31,compute the ending inventory,cost of goods sold,and gross margin under three methods: (a)average-cost,(b)FIFO,and (c)LIFO.Assume the periodic inventory system is used.(Show your work.)

Accepted Answer

@#IMG-DLM&
Goods available for sale: 
	5,000 + 3,0

Question 12

Match each definition with the correct term below.
-LIFO Liquidation

Accepted Answer

A) An inventory management system in which the Internet is used to order and track goods. 
B) A method of valuing inventory that assumes that costs of the first items acquired should be assigned to the first items sold. 
C) A method of estimating inventory that uses the ratio of cost to retail price. 
D) Merchandise that its owner places on the premises of another company with the understanding that payment will be made only when the merchandise is sold. 
E) An inventory management system in which goods arrive just at the time they are needed.
F)when sales have reduced inventories below the levels set in prior years.
G)A method of estimating inventory that assumes the gross margin for a business remains relatively stable from year to year.
H)The association of costs with their assumed flow in the operations of a company.
I)A method of valuing inventory that assumes that the costs of the last items purchased should be assigned to the first items sold.
J)A method of valuing inventory that identifies the cost of each item in ending inventory. 
A) An inventory management system in which the Internet is used to order and track goods. 
B) A method of valuing inventory that assumes that costs of the first items acquired should be assigned to the first items sold. 
C) A method of estimating inventory that uses the ratio of cost to retail price. 
D) Merchandise that its owner places on the premises of another company with the understanding that payment will be made only when the merchandise is sold. 
E) An inventory management system in which goods arrive just at the time they are needed.
F)when sales have reduced inventories below the levels set in prior years.
G)A method of estimating inventory that assumes the gross margin for a business remains relatively stable from year to year.
H)The association of costs with their assumed flow in the operations of a company.
I)A method of valuing inventory that assumes that the costs of the last items purchased should be assigned to the first items sold.
J)A method of valuing inventory that identifies the cost of each item in ending inventory.

Question 13

Goods held on consignment are

Accepted Answer

A)  kept for sale on the premises of the consignor. 
B)  included as part of no one's ending inventory. 
C)  never owned by the consignee. 
D)  included in the consignee's ending inventory. 
A)  kept for sale on the premises of the consignor. 
B)  included as part of no one's ending inventory. 
C)  never owned by the consignee. 
D)  included in the consignee's ending inventory.

Question 14

The computer has made the perpetual inventory system more popular and easier to apply.

Accepted Answer

A) True 
 B)False

Question 15

Emil Hinkel owns and operates a large antique shop.He uses the specific identification method to account for transactions that affect inventory.Hinkel recently completed a physical inventory of the merchandise in his shop as part of his year-end work.Today,his accountant called to inform him that it would be necessary to adjust the inventory figure shown on the balance sheet,which will increase Hinkel's tax liability.Hinkel argued that the inventory had to be correct,because he counted it twice and matched every item to an invoice.Cite reasons why the accountant would find it necessary to adjust the inventory even if Hinkel's count is accurate.

Accepted Answer

The inventory could have been adjusted f

Question 16

Which of the following is an inventory processing system?

Accepted Answer

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

Question 17

Goods held on consignment should be included in the consignee's ending inventory.

Accepted Answer

A) True 
 B)False

Question 18

Use the following figures (stated in millions of dollars)to compute the inventory
turnover and the days' inventory on hand: (Round answers to one decimal place).
   
a.Inventory turnover = ___________________
b.Days' inventory on hand = ___________________

Accepted Answer

a.$13,168 ÷ [($1,830

Question 19

If a company uses LIFO for tax purposes,it must also use LIFO for financial reporting purposes.

Accepted Answer

A) True 
 B)False

Question 20

When taking a physical inventory under the retail method,it is necessary to know only the quantity of items on hand.

Accepted Answer

A) True 
 B)False

Inventory is an example of a long-term asset.

In general,when prices are rising,use of the FIFO method will result in a lower tax liability than the other methods.

The specific identification method and the LIFO method produce the same results under both the perpetual and periodic inventory systems.

Use this inventory information for the month of September to answer the following question. Assuming that a perpetual inventory system is used,what is ending inventory (rounded)under the average-cost method?

Goods in transit shipped FOB destination should be included in the seller's ending inventory.

During periods of consistently falling prices,the FIFO inventory method will produce the highest possible amount of net income.

Average inventory equals $200,000,and cost of goods sold equals $432,000.Inventory turnover equals

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Merchandise inventory is always valued on the balance sheet at its historical cost.

Braxton Company uses the retail method to estimate the cost of ending inventory.Use the following information to estimate the cost of Braxton's ending inventory on December 31,2013,using the retail method.Show your answer in good form.

Match each definition with the correct term below. -LIFO Liquidation

Goods held on consignment are

The computer has made the perpetual inventory system more popular and easier to apply.

Which of the following is an inventory processing system?

Goods held on consignment should be included in the consignee's ending inventory.

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand: (Round answers to one decimal place). a.Inventory turnover = _ b.Days' inventory on hand = _

If a company uses LIFO for tax purposes,it must also use LIFO for financial reporting purposes.

When taking a physical inventory under the retail method,it is necessary to know only the quantity of items on hand.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 7: Inventories

Inventory is an example of a long-term asset.

In general,when prices are rising,use of the FIFO method will result in a lower tax liability than the other methods.

The specific identification method and the LIFO method produce the same results under both the perpetual and periodic inventory systems.

Use this inventory information for the month of September to answer the following question. Assuming that a perpetual inventory system is used,what is ending inventory (rounded)under the average-cost method?

Goods in transit shipped FOB destination should be included in the seller's ending inventory.

During periods of consistently falling prices,the FIFO inventory method will produce the highest possible amount of net income.

Average inventory equals $200,000,and cost of goods sold equals $432,000.Inventory turnover equals

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Merchandise inventory is always valued on the balance sheet at its historical cost.

Braxton Company uses the retail method to estimate the cost of ending inventory.Use the following information to estimate the cost of Braxton's ending inventory on December 31,2013,using the retail method.Show your answer in good form.

Match each definition with the correct term below. -LIFO Liquidation

Goods held on consignment are

The computer has made the perpetual inventory system more popular and easier to apply.

Which of the following is an inventory processing system?

Goods held on consignment should be included in the consignee's ending inventory.

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand: (Round answers to one decimal place). a.Inventory turnover = ___________________ b.Days' inventory on hand = ___________________

If a company uses LIFO for tax purposes,it must also use LIFO for financial reporting purposes.

When taking a physical inventory under the retail method,it is necessary to know only the quantity of items on hand.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand: (Round answers to one decimal place). a.Inventory turnover = _ b.Days' inventory on hand = _