Question 1

Which of the following states that a business must report enough information for outsiders to make knowledgeable decisions about the company?

Accepted Answer

A)  Accounting conservatism 
B)  Materiality concept 
C)  Disclosure principle 
D)  Consistency principle 
A)  Accounting conservatism 
B)  Materiality concept 
C)  Disclosure principle 
D)  Consistency principle C

Question 2

Which of the following inventory costing methods yields the lowest ending inventory when costs are rising during the accounting period?

Accepted Answer

A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out 
A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out C

Question 3

Samson Company had the following balances and transactions during 2012. $$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 10 \text { units at } \$ 70 \
\hline \text { March } 10 & \text { Sold } 8 \text { units } \
\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \
\hline \text { October 30 } & \text { Sold } 15 \text { units } \
\hline
\end{array}$$ What would the company's Inventory amount be on the December 31,2012 balance sheet if the periodic average-costing method is used? (Answers are rounded to the nearest dollar.)

Accepted Answer

A)  $540 
B)  $554 
C)  $490 
D)  $537 
A)  $540 
B)  $554 
C)  $490 
D)  $537 D

Question 4

A company uses periodic inventory in connection with FIFO costing.The company began the year with zero inventory balance.They had the following transactions during the year: Purchased 50 units at $\$ 4.00$ per unit
Purchased 100 units at $\$ 4.10$ per unit
Sold 80 units at a price of $\$ 12.00$ per unit 
Purchased 60 units at $\$ 3.20$ per unit 
Sold 75 units at a price of $\$ 12.75$ per unit
At the end of the year,they counted the inventory and found 55 units remaining.How much was the Cost of goods sold for the year? (Please round to the nearest whole dollar.)

Accepted Answer

A)  $541 
B)  $582 
C)  $626 
D)  $680 
A)  $541 
B)  $582 
C)  $626 
D)  $680

Question 5

Haley's Florist Shop has the following account balances at the end of the current accounting period. $$\begin{array} { | l | r |} 
\hline \text { Beginning inventory } & \$ 53,500 \
\hline \text { Net purchases } & 75,500 \
\hline \text { Net sales revenue } & 93,700 \
\hline
\end{array}$$ A normal gross profit percent is 30%.What is the estimated ending inventory as determined by the gross profit method?

Accepted Answer

A)  $100,890 
B)  $28,110 
C)  $63,410 
D)  $65,590 
A)  $100,890 
B)  $28,110 
C)  $63,410 
D)  $65,590

Question 6

Henderson Sales sold 400 units of product to a customer on account.The selling price was $25 per unit,and the cost,according to the company's inventory records,was $12 per unit.
-Please provide the journal entry to record Cost of goods sold.
 $$\begin{array} { | l | r | r | } 
\hline \quad\quad\quad&\quad&\quad \
\hline \
\hline
\end{array}$$

Accepted Answer

Calculations: 400 ×

Question 7

Berring Sales uses LIFO.The partially completed inventory record for January appears below.   On January 14,the company sold 10 units.On January 29,the company sold 50 units.
-Complete the inventory record and calculate the Cost of goods sold for the month of January.(Please round to the nearest whole dollar.)

Accepted Answer

A)  $242 
B)  $249 
C)  $230 
D)  $228 
A)  $242 
B)  $249 
C)  $230 
D)  $228

Question 8

The following data is available: $$\begin{array} { | r | r | } 
\hline \text { Net sales, first month } & \$ 13,000 \
\hline \text { Normal gross profit } & 45 \% \
\hline \text { Beginning inventory } & 8,000 \
\hline \text { Net purchases } & 7,000 \
\hline
\end{array}$$
-Using the gross profit method,the Estimated ending inventory balance would be:

Accepted Answer

A)  $15,000. 
B)  $7,150. 
C)  $7,850. 
D)  $5,850. 
A)  $15,000. 
B)  $7,150. 
C)  $7,850. 
D)  $5,850.

Question 9

Santa Fe Tile Company had the following inventory purchases and sales during the month of May.The company uses the periodic inventory method. $$\begin{array} { | c | c | c | c | c | c | c | } 
\hline & \text { Purchases } & & & \text { Sales } & & \
\hline \text { Date } & \text { Units } & \text { Unit Cost } & \text { Total } & \text { Units } & \text { Unit Price } & \text { Total } \
\hline \text { May 1 } & 100 & \$ 4 & \$ 400 & & & \
\hline 5 & 200 & 5 & 1,000 & & & \
\hline 10 & & & & 100 & \$ 10 & \$ 1,000 \
\hline 15 & 100 & 6 & 600 & & & \
\hline 20 & 150 & 7 & 1,050 & & & \
\hline 25 & & & & 200 & 11 & \$ 2,200 \
\hline 30 & 160 & 8 & 1,280 & & & \
\hline & 710 & & \$ 4,330 & 300 & & \$ 3,200 \
\hline
\end{array}$$
- If Santa Fe uses average-cost,how much was the Cost of goods sold for the month?

Accepted Answer

A)  $1,400 
B)  $1,850 
C)  $1,380 
D)  $1,615 
A)  $1,400 
B)  $1,850 
C)  $1,380 
D)  $1,615

Question 10

Metro Computer Company had the following balances and transactions during 2014. $$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 100 \text { units at } \$ 75 \
\hline \text { March } 10 & \text { Sold } 50 \text { units } \
\hline \text { June } 10 & \text { Purchased } 200 \text { units at } \$ 80 \
\hline \text { October 30 } & \text { Sold } 150 \text { units } \
\hline
\end{array}$$
- What would the Cost of goods sold be as reported on the income statement at December 31,2014 if the perpetual Last-In,First-Out costing method is used? (Answers are rounded to the nearest dollar.)

Accepted Answer

A)  $15,750 
B)  $12,000 
C)  $3,750 
D)  $15,000 
A)  $15,750 
B)  $12,000 
C)  $3,750 
D)  $15,000

Question 11

Samson Company had the following balances and transactions during 2013. $$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 10 \text { units at } \$ 70 \
\hline \text { March } 10 & \text { Sold } 8 \text { units } \
\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \
\hline \text { October 30 } & \text { Sold } 15 \text { units } \
\hline
\end{array}$$ 
-What would the company's Inventory amount be on the December 31,2013 balance sheet if the perpetual average-costing method is used? (Answers are rounded to the nearest dollar.)

Accepted Answer

A)  $537 
B)  $554 
C)  $490 
D)  $560 
A)  $537 
B)  $554 
C)  $490 
D)  $560

Question 12

Williams Company had the following balances and transactions during 2013. $$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 10 \text { units at } \$ 70 \
\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \
\hline \text { December } 30 & \text { Sold } 15 \text { units } \
\hline \text { December } 31 & \text { Replacement cost } \$ 78 \
\hline
\end{array}$$ What would the company's inventory amount be on the December 31,2013 balance sheet if the perpetual FIFO method is used? (Answers are rounded to the nearest dollar.)

Accepted Answer

A)  $1,200 
B)  $1,170 
C)  $1,050 
D)  $1,100 
A)  $1,200 
B)  $1,170 
C)  $1,050 
D)  $1,100

Question 13

Williams Company had the following balances and transactions during 2013. $$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 10 \text { units at } \$ 70 \
\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \
\hline \text { December } 30 & \text { Sold } 15 \text { units } \
\hline \text { December } 31 & \text { Replacement cost } \$ 78 \
\hline
\end{array}$$ What would the company's inventory amount be on the December 31,2013 balance sheet if the perpetual LIFO method is used? (Answers are rounded to the nearest dollar.)

Accepted Answer

A)  $1,050 
B)  $1,100 
C)  $900 
D)  $1,200 
A)  $1,050 
B)  $1,100 
C)  $900 
D)  $1,200

Question 14

A company uses perpetual inventory in connection with the specific-identification method.The company purchased 30 industrial diamonds for $500 per unit.Later in the month,they purchased another 20 diamonds from another supplier for $480 per unit.On the last day of the month,they sold 18 diamonds to a customer at a price of $800 per unit.Of the 18 diamonds,3 came from the first batch and the remainder came from the second batch.
-Which of the following journal entries correctly records the Sales revenues?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 14,400 & \
\hline \text { Sales revenue } & & 14,400 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Sales revenue } & 14,400 & \
\hline \text { Inventory } & & 14,400 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 8,700 & \
\hline \text { Sales revenue } & & 8,700 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 8,700 & \
\hline \text { Sales revenue } & & 8,700 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 14,400 & \
\hline \text { Sales revenue } & & 14,400 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Sales revenue } & 14,400 & \
\hline \text { Inventory } & & 14,400 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 8,700 & \
\hline \text { Sales revenue } & & 8,700 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 8,700 & \
\hline \text { Sales revenue } & & 8,700 \
\hline
\end{array}$$

Question 15

The sum of the Cost of goods sold and the Ending inventory equals the Cost of goods available.

Accepted Answer

A) True 
 B)False

Question 16

A company should NOT change the inventory costing method each period in order to maximize net income.This is an example of the disclosure principle.

Accepted Answer

A) True 
 B)False

Question 17

Better Buy has six CD players in inventory on December 31.The players were purchased in November for $170.Price lists from Better Buy's supplier indicate that the same CD player would now cost the company $175.The current sales price for each of the CD players is $320.What would be the amount reported as Inventory on the balance sheet?

Accepted Answer

A)  $1,050 
B)  $1,035 
C)  $1,020 
D)  $1,920 
A)  $1,050 
B)  $1,035 
C)  $1,020 
D)  $1,920

Question 18

Better Buy has six CD players in inventory on December 31.The players were purchased in November for $170.Price lists from Better Buy's supplier indicate that the same CD player would now cost the company $168.The current sales price for each of the CD players is $320.The adjustment would have what effect on Cost of goods sold?

Accepted Answer

A)  Cost of goods sold would increase by $2. 
B)  Cost of goods sold would not be affected. 
C)  Cost of goods sold would decrease by $12. 
D)  Cost of goods sold would increase by $12. 
A)  Cost of goods sold would increase by $2. 
B)  Cost of goods sold would not be affected. 
C)  Cost of goods sold would decrease by $12. 
D)  Cost of goods sold would increase by $12.

Question 19

Berring Sales uses the average-cost method.The partially completed inventory record for January appears below.   On January 14,the company sold 10 units.On January 29,the company sold 50 units.
-Complete the inventory record through the January 14 sale,and calculate the Inventory balance after the January 14 sale.(Please round to the nearest whole dollar.)

Accepted Answer

A)  $380 
B)  $330 
C)  $230 
D)  $228 
A)  $380 
B)  $330 
C)  $230 
D)  $228

Question 20

A company that uses the periodic inventory method provides the following information: 
$\begin{array} { l r } 
\text { Beginning inventory } & \$ 4,000 \
\text { Purchases } & \$ 120,000 \
\text { Purchase discounts } & \$ 2,400 \
\text { Purchase returns and allowances } & \$ 800
\end{array}$
At the end of the period,the company does an inventory count and finds $16,000 of inventory on hand.
How much is the Cost of goods sold?

Accepted Answer

A)  $104,800 
B)  $111,200 
C)  $108,000 
D)  $128,800 
A)  $104,800 
B)  $111,200 
C)  $108,000 
D)  $128,800

Which of the following states that a business must report enough information for outsiders to make knowledgeable decisions about the company?

Which of the following inventory costing methods yields the lowest ending inventory when costs are rising during the accounting period?

Haley's Florist Shop has the following account balances at the end of the current accounting period. Beginning inventory \ 53,500 Net purchases 75,500 Net sales revenue 93,700 A normal gross profit percent is 30%.What is the estimated ending inventory as determined by the gross profit method?

Henderson Sales sold 400 units of product to a customer on account.The selling price was $25 per unit,and the cost,according to the company's inventory records,was $12 per unit. -Please provide the journal entry to record Cost of goods sold.

The following data is available: Net sales, first month \ 13,000 Normal gross profit 45\% Beginning inventory 8,000 Net purchases 7,000 -Using the gross profit method,the Estimated ending inventory balance would be:

The sum of the Cost of goods sold and the Ending inventory equals the Cost of goods available.

A company should NOT change the inventory costing method each period in order to maximize net income.This is an example of the disclosure principle.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 6: Merchandising Inventory

Which of the following states that a business must report enough information for outsiders to make knowledgeable decisions about the company?

Which of the following inventory costing methods yields the lowest ending inventory when costs are rising during the accounting period?

Haley's Florist Shop has the following account balances at the end of the current accounting period. Beginning inventory \ 53,500 Net purchases 75,500 Net sales revenue 93,700 A normal gross profit percent is 30%.What is the estimated ending inventory as determined by the gross profit method?

Henderson Sales sold 400 units of product to a customer on account.The selling price was $25 per unit,and the cost,according to the company's inventory records,was $12 per unit. -Please provide the journal entry to record Cost of goods sold.

The following data is available: Net sales, first month \ 13,000 Normal gross profit 45\% Beginning inventory 8,000 Net purchases 7,000 -Using the gross profit method,the Estimated ending inventory balance would be:

The sum of the Cost of goods sold and the Ending inventory equals the Cost of goods available.

A company should NOT change the inventory costing method each period in order to maximize net income.This is an example of the disclosure principle.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters