Question 1

LIFO Reserve = FIFO Inventory Balance - LIFO Inventory Balance.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) $1,500 
B) $700 
C) $750 
D) $500 
A) $1,500 
B) $700 
C) $750 
D) $500

Question 3

When inventory costs are falling,and inventory levels are stable,the LIFO method will generally result in ________.

Accepted Answer

A) a higher gross profit than under FIFO 
B) a lower gross profit than under FIFO 
C) a lower inventory value than under FIFO 
D) a higher cost of goods sold than under FIFO 
A) a higher gross profit than under FIFO 
B) a lower gross profit than under FIFO 
C) a lower inventory value than under FIFO 
D) a higher cost of goods sold than under FIFO

Question 4

Andra Company uses the dollar-value LIFO retail inventory method for inventory costing.Andra Company has beginning inventory with a cost of $10,000 and a retail value of $40,000.During the year,the company purchases goods with a cost basis of $80,000 and a retail basis of $100,000.It has net markups of $10,000 and net markdowns of $5,000.Sales are $50,000 at retail.
The price index for the current year is 1.04.Andra Company adopted the dollar-value LIFO method at the end of the prior year,which is the base year with a price index of 1.00.
Required:
What is the cost of the ending inventory using the dollar-value LIFO retail inventory method? Round all ratios to four decimal places.Round all numbers to two decimal places.

Accepted Answer

@#IMG-DLM& 
 $95,000 / 1.04 = $91,346
 R

Question 5

Meyer Co.has the following information available:   What amount of inventory should the company report on the balance sheet?

Accepted Answer

A) $64,100 
B) $62,100 
C) $59,100 
D) $57,100 
A) $64,100 
B) $62,100 
C) $59,100 
D) $57,100

Question 6

The "ceiling" when computing the Lower-of-Cost-or-Market is the net realizable value.

Accepted Answer

A) True 
 B)False

Question 7

Purchase returns and purchase discounts are added to purchases to calculate net purchases.

Accepted Answer

A) True 
 B)False

Question 8

The gross profit method is often used to estimate the cost of ending inventory.The gross profit method should not be used to ________.

Accepted Answer

A) determine the cost of ending inventory during an interim period without performing a physical count 
B) determine the cost of ending inventory for an annual financial statement 
C) determine the cost of inventory that has been stolen or destroyed 
D) develop budgets 
A) determine the cost of ending inventory during an interim period without performing a physical count 
B) determine the cost of ending inventory for an annual financial statement 
C) determine the cost of inventory that has been stolen or destroyed 
D) develop budgets

Question 9

When goods are shipped f.o.b.shipping point,title passes when the goods reach the buyer's dock.

Accepted Answer

A) True 
 B)False

Question 10

Wetzel Company has the following data available:   If Wetzel Company uses a perpetual moving-average inventory system,the cost of the ending inventory on December 31 is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)

Accepted Answer

A) $12,131.30 
B) $4,718.70 
C) $16,850.00 
D) $5,250.00 
A) $12,131.30 
B) $4,718.70 
C) $16,850.00 
D) $5,250.00

Question 11

A company using LIFO for tax purposes ________.

Accepted Answer

A) can use either LIFO or FIFO for financial reporting 
B) must use LIFO for financial reporting 
C) will have more taxes to pay with LIFO than FIFO in a period of rising inventory costs and stable inventory levels 
D) will report higher net income with LIFO than FIFO in a period of rising inventory costs and stable inventory levels 
A) can use either LIFO or FIFO for financial reporting 
B) must use LIFO for financial reporting 
C) will have more taxes to pay with LIFO than FIFO in a period of rising inventory costs and stable inventory levels 
D) will report higher net income with LIFO than FIFO in a period of rising inventory costs and stable inventory levels

Question 12

Savage Company adopted the dollar-value LIFO method in 2014.At December 31,2014,ending inventory was $100,000,with a price index of 1.00,using dollar-value LIFO.At December 31,2015,the ending inventory using FIFO is $120,000 and the price index is 1.15.What is the LIFO Reserve on December 31,2015?

Accepted Answer

A) $4,348 
B) $15,000 
C) $15,652 
D) $20,000 
A) $4,348 
B) $15,000 
C) $15,652 
D) $20,000

Question 13

The inventory allocation method that assigns the most recent costs to ending inventory and the oldest costs to cost of goods sold is the ________.

Accepted Answer

A) specific identification method 
B) LIFO method 
C) moving-average method 
D) FIFO method 
A) specific identification method 
B) LIFO method 
C) moving-average method 
D) FIFO method

Question 14

Richard Company's financial records report beginning inventory of $534,000; ending inventory of $697,000; and cost of goods sold of $1,354,000.What is the amount of purchases?

Accepted Answer

A) $1,517,000 
B) $2,051,000 
C) $1,234,000 
D) $820,000 
A) $1,517,000 
B) $2,051,000 
C) $1,234,000 
D) $820,000

Question 15

The moving-average method of determining Inventory is used with the perpetual system of inventory.

Accepted Answer

A) True 
 B)False

Question 16

Dollar-value LIFO computes inventory on a pool of inventory on the basis of units.

Accepted Answer

A) True 
 B)False

Question 17

Charles Company's balance sheet reports Raw Materials Inventory,$512,000; Finished Goods Inventory,$667,000; and total inventories at $1,904,000.What is the value of Work-in-Process Inventory?

Accepted Answer

A) $1,479,000 
B) $1,392,000 
C) $725,000 
D) $1,237,000 
A) $1,479,000 
B) $1,392,000 
C) $725,000 
D) $1,237,000

Question 18

Which statement is not correct about perpetual inventory systems?

Accepted Answer

A) The balance in the Inventory account is always up-to-date. 
B) A physical inventory count is not required. 
C) Current information is available for cost of goods sold. 
D) The Inventory account is updated for each purchase and sale. 
A) The balance in the Inventory account is always up-to-date. 
B) A physical inventory count is not required. 
C) Current information is available for cost of goods sold. 
D) The Inventory account is updated for each purchase and sale.

Question 19

A fire destroyed the inventory of Zabo Company.The following information is available:
   Required:
1.Prepare a schedule to compute the amount of inventory lost in the fire using the gross profit method.
2.Prepare the required journal entry after the fire.

Accepted Answer

The answer of A fire destroyed the inventory of Zabo...

Question 20

Vaclav Company has the following data available:   If Vaclav Company uses a perpetual moving-average inventory system,the cost of ending inventory on October 31 is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)

Accepted Answer

A) $34,357.48 
B) $16,319.81 
C) $50,580.19 
D) $66,900.00 
A) $34,357.48 
B) $16,319.81 
C) $50,580.19 
D) $66,900.00

Exam 11: Short-Term Operating Assets: Inventory

LIFO Reserve = FIFO Inventory Balance - LIFO Inventory Balance.

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

When inventory costs are falling,and inventory levels are stable,the LIFO method will generally result in ________.

Meyer Co.has the following information available: What amount of inventory should the company report on the balance sheet?

The "ceiling" when computing the Lower-of-Cost-or-Market is the net realizable value.

Purchase returns and purchase discounts are added to purchases to calculate net purchases.

The gross profit method is often used to estimate the cost of ending inventory.The gross profit method should not be used to ________.

When goods are shipped f.o.b.shipping point,title passes when the goods reach the buyer's dock.

Wetzel Company has the following data available: If Wetzel Company uses a perpetual moving-average inventory system,the cost of the ending inventory on December 31 is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)

A company using LIFO for tax purposes ________.

Savage Company adopted the dollar-value LIFO method in 2014.At December 31,2014,ending inventory was $100,000,with a price index of 1.00,using dollar-value LIFO.At December 31,2015,the ending inventory using FIFO is $120,000 and the price index is 1.15.What is the LIFO Reserve on December 31,2015?

The inventory allocation method that assigns the most recent costs to ending inventory and the oldest costs to cost of goods sold is the ________.

Richard Company's financial records report beginning inventory of $534,000; ending inventory of $697,000; and cost of goods sold of $1,354,000.What is the amount of purchases?

The moving-average method of determining Inventory is used with the perpetual system of inventory.

Dollar-value LIFO computes inventory on a pool of inventory on the basis of units.

Charles Company's balance sheet reports Raw Materials Inventory,$512,000; Finished Goods Inventory,$667,000; and total inventories at $1,904,000.What is the value of Work-in-Process Inventory?

Which statement is not correct about perpetual inventory systems?

A fire destroyed the inventory of Zabo Company.The following information is available: Required: 1.Prepare a schedule to compute the amount of inventory lost in the fire using the gross profit method. 2.Prepare the required journal entry after the fire.

Vaclav Company has the following data available: If Vaclav Company uses a perpetual moving-average inventory system,the cost of ending inventory on October 31 is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)

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

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