Question 1

Consignment goods are:

Accepted Answer

A) Goods shipped by the owner to the consignee who sells the goods for the owner. 
B) Reported in the consignee's books as inventory. 
C) Goods shipped to the consignor who sells the goods for the owner. 
D) Not reported in the consignor's inventory since they do not have possession of the inventory. 
E) Always paid for by the consignee when they take possession. 
A) Goods shipped by the owner to the consignee who sells the goods for the owner. 
B) Reported in the consignee's books as inventory. 
C) Goods shipped to the consignor who sells the goods for the owner. 
D) Not reported in the consignor's inventory since they do not have possession of the inventory. 
E) Always paid for by the consignee when they take possession.

Question 2

The choice of an inventory valuation method has little to no impact on gross profit and cost of sales.

Accepted Answer

A) True 
 B)False

Question 3

The Community Store reported the following amounts on their financial statements for Year 1,Year 2,and Year 3:
   It was discovered early in Year 4 that the ending inventory on December 31,Year 1 was overstated by $6,000,and the ending inventory on December 31,Year 2 was understated by $2,500.The ending inventory on December 31,Year 3 was correct.Ignoring income taxes determine the correct amounts of cost of goods sold,net income,total current assets,and equity for each of the years Year 1,Year 2,and Year 3.

Accepted Answer

The answer of The Community Store reported the following amounts...

Question 4

The ________ method of assigning costs to inventory and cost of goods sold assumes that the inventory items are sold in the order acquired.

Accepted Answer

first in,f

Question 5

In applying the lower of cost or market method to inventory valuation,market is defined as the current selling price.

Accepted Answer

A) True 
 B)False

Question 6

Calculate the ending inventory using FIFO for a company that uses a perpetual inventory system,using the information given below.

Accepted Answer

The answer of Calculate the ending inventory using FIFO for...

Question 7

Generally accepted accounting principles require that the inventory of a company be reported at:

Accepted Answer

A) Market value. 
B) Historical cost. 
C) Lower of cost or market. 
D) Replacement cost. 
E) Retail value. 
A) Market value. 
B) Historical cost. 
C) Lower of cost or market. 
D) Replacement cost. 
E) Retail value.

Question 8

The assignment of costs to cost of goods sold and inventory using weighted average usually yields different results depending on whether a perpetual or periodic system is used.

Accepted Answer

A) True 
 B)False

Question 9

Health Defense sells first aid kits and uses the periodic inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: January 1: Beginning balance of 18 units at $13 each
January 12: Purchased 30 units at $14 each
January 19: Sold 24 units at a selling price of $30 each
January 20: Purchased 24 units at $17 each
January 27: Sold 27 units at a selling price of $30 each
If the ending inventory is reported at $357,what inventory method was used?

Accepted Answer

A) LIFO. 
B) FIFO. 
C) Weighted average. 
D) Specific identification. 
E) Retail inventory method. 
A) LIFO. 
B) FIFO. 
C) Weighted average. 
D) Specific identification. 
E) Retail inventory method.

Question 10

The company's inventory manager receives compensation that includes a bonus based on gross profit.You discover that the inventory manager has knowingly overstated ending inventory by $2 million.What effect does this error have on the financial statements of the company and specifically gross profit? Why would the manager knowingly overstate ending inventory? Would this be considered an ethics violation?

Accepted Answer

By overstating ending inventory,the cost

Question 11

A company uses the periodic inventory system and had the following activity during the current monthly period.   Using the weighted-average inventory method,the company's ending inventory would be:

Accepted Answer

A) $2,000 
B) $2,200 
C) $2,250 
D) $2,400 
E) $4,400 
A) $2,000 
B) $2,200 
C) $2,250 
D) $2,400 
E) $4,400

Question 12

Big Box Store has operated with a 30% average gross profit ratio for a number of years.It had $100,000 in sales during the second quarter of this year.If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter,its estimated ending inventory by the gross profit method is:

Accepted Answer

A) $30,000. 
B) $21,000. 
C) $20,000. 
D) $18,000. 
E) $27,000. 
A) $30,000. 
B) $21,000. 
C) $20,000. 
D) $18,000. 
E) $27,000.

Question 13

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method,
-What is the value of inventory after the October 4 sale?

Accepted Answer

A) $3,485. 
B) $3,445. 
C) $3,500. 
D) $3,472. 
E) $3,461. 
A) $3,485. 
B) $3,445. 
C) $3,500. 
D) $3,472. 
E) $3,461.

Question 14

A company sells garden hoses and uses the perpetual inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during September were as follows: September 1: Beginning balance of 18 units at $13 each
September 12: Purchased 30 units at $14 each
September 19: Sold 24 units at $30 selling price each
September 20: Purchased 24 units at $17 each
September 27: Sold 27 units at $30 selling price each
If the ending inventory is reported at $276,what inventory method was used?

Accepted Answer

A) LIFO method. 
B) FIFO method. 
C) Weighted average method. 
D) Specific identification method. 
E) Retail inventory method. 
A) LIFO method. 
B) FIFO method. 
C) Weighted average method. 
D) Specific identification method. 
E) Retail inventory method.

Question 15

The ________ method of assigning costs to inventory and cost of goods sold requires that we divide the cost of goods available for sale by the units of inventory available at the time of each sale.

Accepted Answer

weighted a

Question 16

Goods on consignment are goods shipped by their owner,called the consignor,to another party called the consignee.The consignee sells goods for the owner.

Accepted Answer

A) True 
 B)False

Question 17

A company had the following purchases and sales during its first year of operations:   On December 31,there were 26 units remaining in ending inventory.
-Using the perpetual FIFO inventory costing method.What is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

Accepted Answer

A) $3,405. 
B) $3,200. 
C) $3,365. 
D) $3,540. 
E) $3,270. 
A) $3,405. 
B) $3,200. 
C) $3,365. 
D) $3,540. 
E) $3,270.

Question 18

Giorgio had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its inventory turnover equals:

Accepted Answer

A) 0.21. 
B) 4.51. 
C) 4.79. 
D) 76.1 days. 
E) 80.9 days. 
A) 0.21. 
B) 4.51. 
C) 4.79. 
D) 76.1 days. 
E) 80.9 days.

Question 19

Avanti purchases inventory from overseas and incurs the following costs: the merchandise cost is $50,000,credit terms 2/10,n/30 that apply only to the $50,000; FOB shipping point freight charges are $1,500; insurance during transit is $500; and import duties are $1,000.Avanti paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions.Compute the cost that should be assigned to the inventory.

Accepted Answer

A) $50,000 
B) $53,000 
C) $52,000 
D) $51,500 
E) $53,200 
A) $50,000 
B) $53,000 
C) $52,000 
D) $51,500 
E) $53,200

Question 20

Buffalo Company reported a December 31 ending inventory balance of $412,000.The following additional information is also available: -The ending inventory balance of $412,000 did not include goods costing $48,000 that were purchased by Buffalo on December 28 and shipped FOB destination on that date.Buffalo did not receive the goods until January 2 of the following year.
-The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000.The net realizable value of the damaged goods was $10,000.
Based on this information,the correct balance for ending inventory on December 31 is:

Accepted Answer

A) $374,000 
B) $384,000 
C) $460,000 
D) $422,000 
E) $438,000 
A) $374,000 
B) $384,000 
C) $460,000 
D) $422,000 
E) $438,000

Consignment goods are:

The choice of an inventory valuation method has little to no impact on gross profit and cost of sales.

The ________ method of assigning costs to inventory and cost of goods sold assumes that the inventory items are sold in the order acquired.

In applying the lower of cost or market method to inventory valuation,market is defined as the current selling price.

Calculate the ending inventory using FIFO for a company that uses a perpetual inventory system,using the information given below.

Generally accepted accounting principles require that the inventory of a company be reported at:

The assignment of costs to cost of goods sold and inventory using weighted average usually yields different results depending on whether a perpetual or periodic system is used.

A company uses the periodic inventory system and had the following activity during the current monthly period. Using the weighted-average inventory method,the company's ending inventory would be:

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method, -What is the value of inventory after the October 4 sale?

The ________ method of assigning costs to inventory and cost of goods sold requires that we divide the cost of goods available for sale by the units of inventory available at the time of each sale.

Goods on consignment are goods shipped by their owner,called the consignor,to another party called the consignee.The consignee sells goods for the owner.

Giorgio had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its inventory turnover equals:

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters

Exam 5: Inventories and Cost of Sales

Consignment goods are:

The choice of an inventory valuation method has little to no impact on gross profit and cost of sales.

The ________ method of assigning costs to inventory and cost of goods sold assumes that the inventory items are sold in the order acquired.

In applying the lower of cost or market method to inventory valuation,market is defined as the current selling price.

Calculate the ending inventory using FIFO for a company that uses a perpetual inventory system,using the information given below.

Generally accepted accounting principles require that the inventory of a company be reported at:

The assignment of costs to cost of goods sold and inventory using weighted average usually yields different results depending on whether a perpetual or periodic system is used.

A company uses the periodic inventory system and had the following activity during the current monthly period. Using the weighted-average inventory method,the company's ending inventory would be:

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method, -What is the value of inventory after the October 4 sale?

The ________ method of assigning costs to inventory and cost of goods sold requires that we divide the cost of goods available for sale by the units of inventory available at the time of each sale.

Goods on consignment are goods shipped by their owner,called the consignor,to another party called the consignee.The consignee sells goods for the owner.

Giorgio had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its inventory turnover equals:

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters