Question 1

Why is the LIFO cost flow assumption an acceptable valuation method for merchandise inventory when it rarely matches the physical movement of the product?

Accepted Answer

LIFO is an acceptable inventory valuatio

Question 2

Match each definition with the correct term below.
-Last-in,last-out

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 3

Use this inventory information for the month of November to answer the following question.   Assuming that a periodic inventory system is used,what is cost of goods sold on a LIFO basis?

Accepted Answer

A)  $15,392 
B)  $15,472 
C)  $7,328 
D)  $7,408 
A)  $15,392 
B)  $15,472 
C)  $7,328 
D)  $7,408

Question 4

A manufacturer's inventory usually consists of raw materials,work in process,and finished goods.

Accepted Answer

A) True 
 B)False

Question 5

Freight charges associated with the purchase of inventory normally are included in inventory cost.

Accepted Answer

A) True 
 B)False

Question 6

Use the following information to calculate ending inventory on (a)a LIFO basis,(b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system.
Round answers to nearest dollar.

Accepted Answer

Ending inventory: 70

Question 7

A company has goods available for sale of $250,000 at retail and $175,000 at cost.It also had sales of $210,000 for the period.What is the estimated cost of ending inventory,using the retail method?

Accepted Answer

A)  $38,000 
B)  $28,000 
C)  $40,000 
D)  $63,000 
A)  $38,000 
B)  $28,000 
C)  $40,000 
D)  $63,000

Question 8

Match each definition with the correct term below.
-Supply-chain management

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.

Why is the LIFO cost flow assumption an acceptable valuation method for merchandise inventory when it rarely matches the physical movement of the product?

Match each definition with the correct term below. -Last-in,last-out

Use this inventory information for the month of November to answer the following question. Assuming that a periodic inventory system is used,what is cost of goods sold on a LIFO basis?

A manufacturer's inventory usually consists of raw materials,work in process,and finished goods.

Freight charges associated with the purchase of inventory normally are included in inventory cost.

Use the following information to calculate ending inventory on (a)a LIFO basis,(b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system. Round answers to nearest dollar.

A company has goods available for sale of $250,000 at retail and $175,000 at cost.It also had sales of $210,000 for the period.What is the estimated cost of ending inventory,using the retail method?

Match each definition with the correct term below. -Supply-chain management

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

Why is the LIFO cost flow assumption an acceptable valuation method for merchandise inventory when it rarely matches the physical movement of the product?

Match each definition with the correct term below. -Last-in,last-out

Use this inventory information for the month of November to answer the following question. Assuming that a periodic inventory system is used,what is cost of goods sold on a LIFO basis?

A manufacturer's inventory usually consists of raw materials,work in process,and finished goods.

Freight charges associated with the purchase of inventory normally are included in inventory cost.

Use the following information to calculate ending inventory on (a)a LIFO basis,(b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system. Round answers to nearest dollar.

A company has goods available for sale of $250,000 at retail and $175,000 at cost.It also had sales of $210,000 for the period.What is the estimated cost of ending inventory,using the retail method?

Match each definition with the correct term below. -Supply-chain management

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