Question 1

When applying the lower of cost or market method of inventory valuation for LIFO,market is defined as the ________.

Accepted Answer

The answer of When applying the lower of cost or...

Question 2

The choice of costing method will impact both the balance sheet and income statement.

Accepted Answer

A) True 
 B)False

Question 3

A company made the following merchandise purchases and sales during the month of May:
   There was no beginning inventory.
-If the company uses the weighted average periodic method,what would be the cost of the ending inventory?

Accepted Answer

The answer of A company made the following merchandise purchases...

Question 4

When inventory costs are declining,explain the impact to the balance sheet and income statement using the FIFO method.

Accepted Answer

In a period of declining inven

Question 5

Net realizable value for damaged or obsolete goods is sales price less the cost of making the sale.

Accepted Answer

A) True 
 B)False

Question 6

Decisions management must make in accounting for inventory cost include all of the following except:

Accepted Answer

A) Costing method. 
B) Perpetual or periodic inventory system. 
C) Customer demand for inventory. 
D) Damage or obsolescence 
E) Items included in inventory and their costs. 
A) Costing method. 
B) Perpetual or periodic inventory system. 
C) Customer demand for inventory. 
D) Damage or obsolescence 
E) Items included in inventory and their costs.

Question 7

Sandoval needs to determine its year-end inventory.The warehouse contains 20,000 units,of which 3,000 were damaged by flood and are not sellable.Another 2,000 units were purchased from Markor Company,FOB shipping point,and are currently in transit.The company also consigns goods and has 4,000 units at a consignee's location.How many units should Sandoval include in its year-end inventory?

Accepted Answer

A) 29,000 
B) 21,000 
C) 23,000 
D) 19,000 
E) 26,000 
A) 29,000 
B) 21,000 
C) 23,000 
D) 19,000 
E) 26,000

Question 8

Salmone Company reported the following purchases and sales of its only product.Salmone uses a perpetual inventory system.
 
-Determine the cost assigned to cost of goods sold using LIFO.

Accepted Answer

A) $2,590 
B) $2,850 
C) $2,580 
D) $2,860 
E) $2,460 
A) $2,590 
B) $2,850 
C) $2,580 
D) $2,860 
E) $2,460

Question 9

A company reports the following information regarding its inventory. Beginning inventory: cost is $80,000; retail is $130,000
Net purchases: cost is $65,000; retail is $120,000
Sales at retail: $145,000
The year-end inventory shows $105,000 worth of merchandise available at retail prices.What is the cost of the ending inventory calculated using the retail inventory method?

Accepted Answer

A) $135,000. 
B) $73,125. 
C) $60,900. 
D) $72,900. 
E) $105,000. 
A) $135,000. 
B) $73,125. 
C) $60,900. 
D) $72,900. 
E) $105,000.

Question 10

Explain the effects of inventory valuation methods on the cost of ending inventory,income,and income taxes.

Accepted Answer

The specific identification method exact

Question 11

Monarch Company uses a weighted-average perpetual inventory system,and has the following purchases and sales:  
-What is the value of ending inventory? (Round average cost per unit to 2 decimal places and final answer to the nearest dollar.)

Accepted Answer

A) $278. 
B) $272. 
C) $126. 
D) $398. 
E) $120. 
A) $278. 
B) $272. 
C) $126. 
D) $398. 
E) $120.

Question 12

All of the following statements related to goods on consignment are true except:

Accepted Answer

A) Goods on consignment are goods provided by the owner,call the consignor. 
B) A consignee sells goods for the owner. 
C) The consignor continues to own the consigned goods. 
D) The consignee reports the goods in its inventory until sold. 
E) The consignor reports the goods in its inventory until sold. 
A) Goods on consignment are goods provided by the owner,call the consignor. 
B) A consignee sells goods for the owner. 
C) The consignor continues to own the consigned goods. 
D) The consignee reports the goods in its inventory until sold. 
E) The consignor reports the goods in its inventory until sold.

Question 13

Mary's Antiques does not have its own retail location,instead maintains inventory in its warehouse and sells merchandise through Oldtime Antique Mall.Oldtime does not assume responsibility for goods until they are sold to customers at which time it takes a commission for items sold and sends the sale proceeds to Mary's.Identify which company has the role of the consignor and the consignee.Which company should include any unsold goods as part of its inventory?

Accepted Answer

Mary's Antiques is the consign

Question 14

The days' sales in inventory ratio is computed by dividing ending inventory by cost of goods sold and multiplying the result by 365.

Accepted Answer

A) True 
 B)False

Question 15

________ is the estimated sales price of damaged goods minus the cost of making the sale.

Accepted Answer

Net realiz

Question 16

Accounting principles require that inventory be reported at the market value (cost)of replacing inventory when cost is lower than market value.

Accepted Answer

A) True 
 B)False

Question 17

LIFO assumes that inventory costs flow in the order incurred.

Accepted Answer

A) True 
 B)False

Question 18

A company's inventory records indicate the following data for the month of July:
   If the company uses the weighted average inventory valuation method and the perpetual inventory system,what would be the cost of its ending inventory? (Round average cost per unit to 2 decimals,and final answer to the nearest dollar.)

Accepted Answer

Note: As a result of rounding

Question 19

A company uses the retail inventory method and has the following information available concerning its most recent accounting period:
   1.What is the cost-to-retail ratio using the retail method?
2.What is the estimated cost of the ending inventory?

Accepted Answer

The answer of A company uses the retail inventory method...

Question 20

A flood destroyed a company's warehouse contents on September 12.The following information was the only information that was salvaged: -Inventory,beginning: $28,000
-Purchases for the period: $17,000
-Sales for the period: $55,000
-Sales returns for the period: $700
The company's average gross profit ratio is 35%.What is the estimated cost of the lost inventory using the gross profit method?

Accepted Answer

A) $9,705. 
B) $25,995. 
C) $29,250. 
D) $44,000. 
E) $45,000. 
A) $9,705. 
B) $25,995. 
C) $29,250. 
D) $44,000. 
E) $45,000.

Exam 5: Inventories and Cost of Sales

When applying the lower of cost or market method of inventory valuation for LIFO,market is defined as the ________.

The choice of costing method will impact both the balance sheet and income statement.

A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory. -If the company uses the weighted average periodic method,what would be the cost of the ending inventory?

When inventory costs are declining,explain the impact to the balance sheet and income statement using the FIFO method.

Net realizable value for damaged or obsolete goods is sales price less the cost of making the sale.

Decisions management must make in accounting for inventory cost include all of the following except:

Salmone Company reported the following purchases and sales of its only product.Salmone uses a perpetual inventory system. -Determine the cost assigned to cost of goods sold using LIFO.

Explain the effects of inventory valuation methods on the cost of ending inventory,income,and income taxes.

Monarch Company uses a weighted-average perpetual inventory system,and has the following purchases and sales: -What is the value of ending inventory? (Round average cost per unit to 2 decimal places and final answer to the nearest dollar.)

All of the following statements related to goods on consignment are true except:

The days' sales in inventory ratio is computed by dividing ending inventory by cost of goods sold and multiplying the result by 365.

________ is the estimated sales price of damaged goods minus the cost of making the sale.

Accounting principles require that inventory be reported at the market value (cost)of replacing inventory when cost is lower than market value.

LIFO assumes that inventory costs flow in the order incurred.

A company uses the retail inventory method and has the following information available concerning its most recent accounting period: 1.What is the cost-to-retail ratio using the retail method? 2.What is the estimated cost of the ending inventory?

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

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