Question 1

Chet Company provides the following information:   What is the cost of goods sold?

Accepted Answer

A) $607,000 
B) $482,000 
C) $620,000 
D) $490,000 
A) $607,000 
B) $482,000 
C) $620,000 
D) $490,000

Question 2

A company begins the year with a zero balance in the LIFO Reserve account.Based on an analysis of LIFO and FIFO,the company determines the LIFO Reserve should be $20,000 at the end of the year? Which journal entry is needed?

Accepted Answer

A) Debit Cost of Goods Sold for $20,000 and Credit LIFO Reserve for $20,000. 
B) Debit LIFO Reserve for $20,000 and Credit Cost of Goods Sold for $20,000. 
C) Debit Cost of Goods Sold for $20,000 and Credit Inventory for $20,000. 
D) Debit Inventory for $20,000 and Credit Gain on Inventory for $20,000. 
A) Debit Cost of Goods Sold for $20,000 and Credit LIFO Reserve for $20,000. 
B) Debit LIFO Reserve for $20,000 and Credit Cost of Goods Sold for $20,000. 
C) Debit Cost of Goods Sold for $20,000 and Credit Inventory for $20,000. 
D) Debit Inventory for $20,000 and Credit Gain on Inventory for $20,000.

Question 3

A company uses the basic retail method to estimate the cost of ending inventory for interim financial statements.Which of the following responses describe the correct treatment of markups and markup cancellations in the calculation of the cost-to-retail ratio?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 4

Maki Company has the following data available:   If Maki Company uses a perpetual FIFO inventory system,the cost of ending inventory on October 31 is ________.

Accepted Answer

A) $14,800 
B) $13,875 
C) $49,400 
D) $63,900 
A) $14,800 
B) $13,875 
C) $49,400 
D) $63,900

Question 5

Michael Jones Company has adopted the dollar-value LIFO method in 2014.At December 31,2014,the ending inventory at dollar-value LIFO is $100,000,with a price index of 1.00.At December 31,2015,the ending inventory using FIFO is $125,000.The price index is 1.30 in 2015.Round all dollar amounts to the nearest dollar.What is the ending inventory using dollar-value LIFO at December 31,2015?

Accepted Answer

A) $100,000 
B) $119,231 
C) $96,154 
D) $125,000 
A) $100,000 
B) $119,231 
C) $96,154 
D) $125,000

Question 6

The Peggy Ahlers Company uses the perpetual inventory system and the FIFO method.At the end of the fiscal year,December 31,2015,the company conducted a physical count of the inventory on hand at all warehouses and stores.The FIFO cost of the physical count is $1,005,400.According to the records,ending inventory using FIFO is $1,122,000.Which journal entry is required at December 31,2015?

Accepted Answer

A) No journal entry is required. 
B) Debit Inventory $116,600 and credit Allowance to Reduce Inventory $116,600. 
C) Debit Cost of Goods Sold $116,600 and credit Allowance to Reduce Inventory $116,600. 
D) Debit Loss on Inventory Shortage $116,600 and credit Inventory $116,600. 
A) No journal entry is required. 
B) Debit Inventory $116,600 and credit Allowance to Reduce Inventory $116,600. 
C) Debit Cost of Goods Sold $116,600 and credit Allowance to Reduce Inventory $116,600. 
D) Debit Loss on Inventory Shortage $116,600 and credit Inventory $116,600.

Question 7

Purchase returns and purchase discounts are subtracted from purchases to calculate net purchases.

Accepted Answer

A) True 
 B)False

Question 8

Potter Company has the following data available:   If Potter Company uses a perpetual moving-average inventory system,the cost of goods sold for the year is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)

Accepted Answer

A) $4,718.70 
B) $12,087.88 
C) $16,100.00 
D) $11,381.30 
A) $4,718.70 
B) $12,087.88 
C) $16,100.00 
D) $11,381.30

Question 9

Bombard Company has the following data available:   If Bombard Company uses a perpetual LIFO inventory system,the cost of goods sold for the year is ________.

Accepted Answer

A) $3,500 
B) $5,520 
C) $16,850 
D) $13,350 
A) $3,500 
B) $5,520 
C) $16,850 
D) $13,350

Question 10

The following information is available for the past month for a retail store:   What is the ending inventory at cost using the conventional retail method? (Round cost-to-retail ratios to four decimal places.)

Accepted Answer

A) $31,853 
B) $33,292 
C) $27,000 
D) $75,000 
A) $31,853 
B) $33,292 
C) $27,000 
D) $75,000

Question 11

A large company uses a perpetual inventory system and a sophisticated computerized system to account for its inventory over time.At the end of the accounting period,the company performs a physical count of the inventory on hand and hires hundreds of workers to carry out this task.
Required:
1.Why does the company perform a physical count of inventory?
2.After the physical count of inventory is completed,describe the required journal entry and provide an example.

Accepted Answer

1.The company performs a physical count

Question 12

Jamison Company sells goods to Matthews Company.When Jamison ships goods to Matthews with terms f.o.b.shipping point,________.

Accepted Answer

A) Jamison Company reports the goods in its inventory when the goods are in transit to Matthews Company 
B) the title passes from Jamison Company to Matthews Company when the goods are received by Matthews Company 
C) the title passes from Jamison Company to Matthews Company when the goods leave Jamison Company 
D) Matthews Company does not include the goods in its inventory while the goods are in transit 
A) Jamison Company reports the goods in its inventory when the goods are in transit to Matthews Company 
B) the title passes from Jamison Company to Matthews Company when the goods are received by Matthews Company 
C) the title passes from Jamison Company to Matthews Company when the goods leave Jamison Company 
D) Matthews Company does not include the goods in its inventory while the goods are in transit

Question 13

Assume inventory costs are increasing over time and inventory levels are stable.Which inventory method results in a higher net income and a higher ending inventory?

Accepted Answer

A) FIFO 
B) average cost 
C) LIFO 
D) conventional retail 
A) FIFO 
B) average cost 
C) LIFO 
D) conventional retail

Question 14

The following transactions occurred for MM's Jewelry Store during the month:
a.On May 1,the owner purchased 100 rings on account at $6,000 each.Credit terms were 2/10,net 30.
b.On May 2,the owner returned one ring.
c.On May 3,the owner sold three of the rings on account at $8,000 each to one customer.The credit terms were 2/10,net 30.
d.On May 9,the owner paid the debt due.
e.On May 15,the customer from May 3 paid for the rings.
Required:
Prepare the journal entries for the above transactions.
1.The store uses the perpetual inventory system and the gross method to record purchase discounts.Explanations are not required.
2.The store uses the periodic inventory system and the net method to record purchase discounts.Explanations are not required.

Accepted Answer

The answer of The following transactions occurred for MM's Jewelry...

Question 15

Beck Company has inventory of $725,000 in its stores as of December 31.It also has two shipments in-transit that left the suppliers' warehouses by December 28.Both shipments are expected to arrive on January 5.The first shipment of $210,000 was sold f.o.b.destination and the second shipment of $102,000 was sold f.o.b.shipping point.Beck Company also has consigned goods of $72,000 awaiting sale with Meyer Company.What amount of inventory should Beck Company report on its balance sheet as of December 31?

Accepted Answer

A) $725,000 
B) $899,000 
C) $1,007,000 
D) $1,109,000 
A) $725,000 
B) $899,000 
C) $1,007,000 
D) $1,109,000

Question 16

Under the conventional retail inventory method net markups and net markdowns are both used to determine the cost to retail percentage.

Accepted Answer

A) True 
 B)False

Question 17

The ABC Enterprise Company uses the perpetual inventory system.The company has the following data available for the month of April:   What is the cost of ending inventory on April 30 using moving average?

Accepted Answer

A) $354 
B) $336 
C) $342 
D) $310 
A) $354 
B) $336 
C) $342 
D) $310

Question 18

The following information is available for the month of June for a retail store:
   Required:
Calculate the ending inventory at cost using the basic retail method.Round ratios to four decimal places.(For example,0.40127 = 0.4013)

Accepted Answer

The answer of The following information is available for the...

Question 19

To calculate inventory using the gross profit method,one must know the gross profit percentage.

Accepted Answer

A) True 
 B)False

Question 20

The inventory turnover ratio equals ________.

Accepted Answer

A) cost of goods sold divided by average inventory 
B) sales revenue divided by average inventory 
C) sales revenue divided by cost of goods sold 
D) 365 divided by average inventory 
A) cost of goods sold divided by average inventory 
B) sales revenue divided by average inventory 
C) sales revenue divided by cost of goods sold 
D) 365 divided by average inventory

Chet Company provides the following information: What is the cost of goods sold?

A company begins the year with a zero balance in the LIFO Reserve account.Based on an analysis of LIFO and FIFO,the company determines the LIFO Reserve should be $20,000 at the end of the year? Which journal entry is needed?

A company uses the basic retail method to estimate the cost of ending inventory for interim financial statements.Which of the following responses describe the correct treatment of markups and markup cancellations in the calculation of the cost-to-retail ratio?

Maki Company has the following data available: If Maki Company uses a perpetual FIFO inventory system,the cost of ending inventory on October 31 is ________.

Purchase returns and purchase discounts are subtracted from purchases to calculate net purchases.

Potter Company has the following data available: If Potter Company uses a perpetual moving-average inventory system,the cost of goods sold for the year is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)

Bombard Company has the following data available: If Bombard Company uses a perpetual LIFO inventory system,the cost of goods sold for the year is ________.

The following information is available for the past month for a retail store: What is the ending inventory at cost using the conventional retail method? (Round cost-to-retail ratios to four decimal places.)

Jamison Company sells goods to Matthews Company.When Jamison ships goods to Matthews with terms f.o.b.shipping point,________.

Assume inventory costs are increasing over time and inventory levels are stable.Which inventory method results in a higher net income and a higher ending inventory?

Under the conventional retail inventory method net markups and net markdowns are both used to determine the cost to retail percentage.

The ABC Enterprise Company uses the perpetual inventory system.The company has the following data available for the month of April: What is the cost of ending inventory on April 30 using moving average?

The following information is available for the month of June for a retail store: Required: Calculate the ending inventory at cost using the basic retail method.Round ratios to four decimal places.(For example,0.40127 = 0.4013)

To calculate inventory using the gross profit method,one must know the gross profit percentage.

The inventory turnover ratio equals ________.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

Filters

Exam 11: Short-Term Operating Assets: Inventory

Chet Company provides the following information: What is the cost of goods sold?

A company begins the year with a zero balance in the LIFO Reserve account.Based on an analysis of LIFO and FIFO,the company determines the LIFO Reserve should be $20,000 at the end of the year? Which journal entry is needed?

A company uses the basic retail method to estimate the cost of ending inventory for interim financial statements.Which of the following responses describe the correct treatment of markups and markup cancellations in the calculation of the cost-to-retail ratio?

Maki Company has the following data available: If Maki Company uses a perpetual FIFO inventory system,the cost of ending inventory on October 31 is ________.

Purchase returns and purchase discounts are subtracted from purchases to calculate net purchases.

Potter Company has the following data available: If Potter Company uses a perpetual moving-average inventory system,the cost of goods sold for the year is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)

Bombard Company has the following data available: If Bombard Company uses a perpetual LIFO inventory system,the cost of goods sold for the year is ________.

The following information is available for the past month for a retail store: What is the ending inventory at cost using the conventional retail method? (Round cost-to-retail ratios to four decimal places.)

Jamison Company sells goods to Matthews Company.When Jamison ships goods to Matthews with terms f.o.b.shipping point,________.

Assume inventory costs are increasing over time and inventory levels are stable.Which inventory method results in a higher net income and a higher ending inventory?

Under the conventional retail inventory method net markups and net markdowns are both used to determine the cost to retail percentage.

The ABC Enterprise Company uses the perpetual inventory system.The company has the following data available for the month of April: What is the cost of ending inventory on April 30 using moving average?

The following information is available for the month of June for a retail store: Required: Calculate the ending inventory at cost using the basic retail method.Round ratios to four decimal places.(For example,0.40127 = 0.4013)

To calculate inventory using the gross profit method,one must know the gross profit percentage.

The inventory turnover ratio equals ________.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

Filters