Question 1

The lower of cost or market is a method of inventory valuation.

Accepted Answer

A) True 
 B)False

Question 2

Beginning inventory, purchases and sales data for T-shirts are as follows:   ​
Assuming the business maintains a periodic inventory system, calculate the cost of goods sold and ending inventory under the following assumptions: 
a. FIFO
b. LIFO
c. Average cost (round cost of goods sold and ending inventory to the nearest dollar)

Accepted Answer

a. FIFO @#IMG-DLM&_TB2281_00 ​

Question 3

While taking a physical inventory, a company counts its inventory as less than the actual amount on hand. How will this error affect the income statement?

Accepted Answer

Net income

Question 4

The inventory method that assigns the most recent costs to cost of goods sold is

Accepted Answer

A)  FIFO 
B)  LIFO 
C)  weighted average 
D)  specific identification 
A)  FIFO 
B)  LIFO 
C)  weighted average 
D)  specific identification

Question 5

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September.
  
-Use the information in the table to answer this question. If Addison uses FIFO, the September 17 entry for cost of goods sold would be: ?

Accepted Answer

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

Question 6

Inventory turnover measures the length of time it takes to acquire, sell, and replace the inventory.

Accepted Answer

A) True 
 B)False

Question 7

The specific identification inventory method should be used when the inventory consists of identical, low-cost units that are purchased and sold frequently.

Accepted Answer

A) True 
 B)False

Question 8

The units of Manganese Plus available for sale during the year were as follows:   ​
There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost by (a) FIFO, (b) LIFO, and (c) average cost methods.

Accepted Answer

The answer of The units of Manganese Plus available for...

Question 9

Based upon the following data, estimate the cost of ending inventory using the gross profit method.

Accepted Answer

The answer of Based upon the following data, estimate the...

Question 10

Beginning inventory, purchases, and sales data for tennis rackets are as follows:   ​
Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using LIFO.

Accepted Answer

The answer of Beginning inventory, purchases, and sales data for...

Question 11

If inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

Accepted Answer

A)  periodic 
B)  LIFO 
C)  FIFO 
D)  average cost 
A)  periodic 
B)  LIFO 
C)  FIFO 
D)  average cost

Question 12

The three inventory costing methods will normally each yield different amounts of net income.

Accepted Answer

A) True 
 B)False

Question 13

Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

Accepted Answer

A) True 
 B)False

Question 14

Based on the following data, calculate the estimated cost of the inventory on March 31 using the retail method.

Accepted Answer

The answer of Based on the following data, calculate the...

Question 15

Under the _____ inventory method, accounting records maintain a continuously updated inventory value.

Accepted Answer

A)  retail 
B)  periodic 
C)  physical 
D)  perpetual 
A)  retail 
B)  periodic 
C)  physical 
D)  perpetual

Question 16

1. Explain the effect of the following on the financial statements:
 
Goods held on consignment were included in the ending inventory count.
 
Goods purchased FOB shipping point were in transit on the last day of the year.
The goods were not counted as part of ending inventory.
 
Goods sold FOB shipping point were in transit on the last day of the year.
These goods were not counted as part of ending inventory.
 
2. What happens if inventory errors are not found and corrected?

Accepted Answer

1. <b>Goods held on consignment were inc

Question 17

Based on the following information: compute (a) inventory turnover; (b) average daily cost of goods sold; and (c) number of days' sales in inventory for the current year. Use a 365-day year. (d) If an inventory turnover of 12 is average for the industry, how is this company doing?

Accepted Answer

The answer of Based on the following information: compute (a)...

Question 18

Use the information below to answer the following questions.
The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.
   ​
​
-Assuming that the company uses the perpetual inventory system, determine the cost of goods sold for the sale of May 20 using the LIFO inventory cost method.

Accepted Answer

A)  $136 
B)  $144 
C)  $180 
D)  $120 
A)  $136 
B)  $144 
C)  $180 
D)  $120

Question 19

Which of the following measures the length of time it takes to acquire, sell, and replace inventory?

Accepted Answer

A)  inventory turnover 
B)  number of days' sales in inventory 
C)  retail method of inventory costing 
D)  gross profit method of inventory costing 
A)  inventory turnover 
B)  number of days' sales in inventory 
C)  retail method of inventory costing 
D)  gross profit method of inventory costing

Question 20

The following lots of Commodity Z were available for sale during the year. Use this information to answer the questions that follow.
 $$\begin{array} { l l } 
\text { Beginning inventory } & 10 \text { units at } \$ 30 \
\text { First purchase } & 25 \text { units at } \$ 32 \
\text { Second purchase } & 30 \text { units at } \$ 34 \
\text { Third purchase } & 10 \text { units at } \$ 35
\end{array}$$ ​
​
-The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year rounded to nearest dollar according to the average cost method?

Accepted Answer

A)  $655 
B)  $620 
C)  $690 
D)  $659 
A)  $655 
B)  $620 
C)  $690 
D)  $659

The lower of cost or market is a method of inventory valuation.

While taking a physical inventory, a company counts its inventory as less than the actual amount on hand. How will this error affect the income statement?

The inventory method that assigns the most recent costs to cost of goods sold is

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. -Use the information in the table to answer this question. If Addison uses FIFO, the September 17 entry for cost of goods sold would be: ?

Inventory turnover measures the length of time it takes to acquire, sell, and replace the inventory.

The specific identification inventory method should be used when the inventory consists of identical, low-cost units that are purchased and sold frequently.

The units of Manganese Plus available for sale during the year were as follows: There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost by (a) FIFO, (b) LIFO, and (c) average cost methods.

Based upon the following data, estimate the cost of ending inventory using the gross profit method.

Beginning inventory, purchases, and sales data for tennis rackets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using LIFO.

If inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

The three inventory costing methods will normally each yield different amounts of net income.

Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

Based on the following data, calculate the estimated cost of the inventory on March 31 using the retail method.

Under the _____ inventory method, accounting records maintain a continuously updated inventory value.

Based on the following information: compute (a) inventory turnover; (b) average daily cost of goods sold; and (c) number of days' sales in inventory for the current year. Use a 365-day year. (d) If an inventory turnover of 12 is average for the industry, how is this company doing?

Which of the following measures the length of time it takes to acquire, sell, and replace inventory?

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Exam 6: Inventories

The lower of cost or market is a method of inventory valuation.

While taking a physical inventory, a company counts its inventory as less than the actual amount on hand. How will this error affect the income statement?

The inventory method that assigns the most recent costs to cost of goods sold is

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. -Use the information in the table to answer this question. If Addison uses FIFO, the September 17 entry for cost of goods sold would be: ?

Inventory turnover measures the length of time it takes to acquire, sell, and replace the inventory.

The specific identification inventory method should be used when the inventory consists of identical, low-cost units that are purchased and sold frequently.

The units of Manganese Plus available for sale during the year were as follows: ​ There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost by (a) FIFO, (b) LIFO, and (c) average cost methods.

Based upon the following data, estimate the cost of ending inventory using the gross profit method.

Beginning inventory, purchases, and sales data for tennis rackets are as follows: ​ Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using LIFO.

If inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

The three inventory costing methods will normally each yield different amounts of net income.

Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

Based on the following data, calculate the estimated cost of the inventory on March 31 using the retail method.

Under the _____ inventory method, accounting records maintain a continuously updated inventory value.

Based on the following information: compute (a) inventory turnover; (b) average daily cost of goods sold; and (c) number of days' sales in inventory for the current year. Use a 365-day year. (d) If an inventory turnover of 12 is average for the industry, how is this company doing?

Which of the following measures the length of time it takes to acquire, sell, and replace inventory?

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

The units of Manganese Plus available for sale during the year were as follows: There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost by (a) FIFO, (b) LIFO, and (c) average cost methods.

Beginning inventory, purchases, and sales data for tennis rackets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using LIFO.