Question 1

The inventory costing method that reports the most current prices in ending inventory is

Accepted Answer

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

Question 2

Determine the total value of the merchandise using net realizable value. $$\begin{array} { | l | c | c | c | } 
\hline { \text { Item } } & \text { Quantity } & \text { Selling Price } & \text { Commission } \
\hline \text { Doll } & 10 & \$ 7 & \$ 2 \
\hline \text { Horse } & 5 & 9 & 3 \
\hline
\end{array}$$

Accepted Answer

A)  $35 
B)  $80 
C)  $115 
D)  $25 
A)  $35 
B)  $80 
C)  $115 
D)  $25

Question 3

If inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

Accepted Answer

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

Question 4

Match between columns
                        Premises:  This system can be costly and time consuming if not computerized.
 Average cost is rarely used with this system.
 Under this system, only revenue is recorded when sales are made.
 When using this system, a physical inventory is necessary to determine cost of goods sold.

Accepted Answer

The Answer of Perpetual and Periodic is...

Question 5

If Beginning Inventory (BI) + Purchases (P) - Ending Inventory (EI) = Cost of Goods Sold (COGS), an equivalent equation can be written as

Accepted Answer

A)  BI + P = COGS - EI 
B)  BI - P = COGS + EI 
C)  BI + P = COGS + EI 
D)  EI + P = COGS - BI 
A)  BI + P = COGS - EI 
B)  BI - P = COGS + EI 
C)  BI + P = COGS + EI 
D)  EI + P = COGS - BI

Question 6

During periods of decreasing costs, the use of the LIFO method of costing inventory will result in a lower amount of net income than would result from the use of the FIFO method.

Accepted Answer

A) True 
 B)False

Question 7

The choice of an inventory costing method has no significant impact on the financial statements.

Accepted Answer

A) True 
 B)False

Question 8

Too much inventory on hand

Accepted Answer

A)  ties up funds that could be used to improve operations 
B)  increases the cost to safeguard the assets 
C)  increases the losses due to price declines 
D)  all of these 
A)  ties up funds that could be used to improve operations 
B)  increases the cost to safeguard the assets 
C)  increases the losses due to price declines 
D)  all of these

Question 9

Beginning inventory, purchases, and sales data for hammers are as follows:   ​
Assuming the business maintains a perpetual inventory system, complete the inventory cards and calculate the cost of goods sold and ending inventory under the following assumptions:
(a) First-in, first-out   ​
(b) Last-in, first-out

Accepted Answer

a. First-in, first-o

Question 10

If the perpetual inventory system is used, the inventory account is debited for purchases of merchandise.

Accepted Answer

A) True 
 B)False

Question 11

The following data were taken from the annual reports of Big Bang Inc., a manufacturer of fireworks, and Orange Inc., a manufacturer of computers.   ​
(a) Determine the (1) inventory turnover and (2) number of days' sales in inventory for Big Bang and Orange.
Round your answers to two decimal places.
(b) How would you expect these measures to compare between the companies? Why?

Accepted Answer

The answer of The following data were taken from the...

Question 12

The following lots of a Commodity P were available for sale during the year. Use this information to answer the questions that follow.
​
   ​
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 year-end inventory balance using the average cost method? Use the information provided in the table to answer this question

Accepted Answer

A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250 
A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250

Question 13

Safeguarding inventory and proper reporting of the inventory in the financial statements are the reasons for controlling the inventory.

Accepted Answer

A) True 
 B)False

Question 14

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations.
  
-Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the FIFO perpetual inventory method.

Accepted Answer

A)  Total sales: $56,975.00
Cost of goods sold: $36,431.25
Gross profit: $20,543.75
Ending inventory: $19,981.2 
B)  Total sales: $56,975.00
Cost of goods sold: $36,587.50
Gross profit: $20,387.50
Ending inventory: $19,825.00 
C)  Total sales: $56,975.00
Cost of goods sold: $37,312.50
Gross profit: $19,662.50
Ending inventory: $19,573.25 
D)  Total sales: $56,975.00
Cost of goods sold: $37,401.75
Gross profit: $19,573.25
Ending inventory: $19,010.75 
A)  Total sales: $56,975.00
Cost of goods sold: $36,431.25
Gross profit: $20,543.75
Ending inventory: $19,981.2 
B)  Total sales: $56,975.00
Cost of goods sold: $36,587.50
Gross profit: $20,387.50
Ending inventory: $19,825.00 
C)  Total sales: $56,975.00
Cost of goods sold: $37,312.50
Gross profit: $19,662.50
Ending inventory: $19,573.25 
D)  Total sales: $56,975.00
Cost of goods sold: $37,401.75
Gross profit: $19,573.25
Ending inventory: $19,010.75

Question 15

The units of Product Green-2 available for sale during the year were as follows:   ​
There are 17 units of the product in the physical inventory at September 30. The periodic inventory system is used. Determine the cost of goods sold by (a) FIFO, (b) LIFO, and (c) average cost methods.

Accepted Answer

The answer of The units of Product Green-2 available for...

Question 16

The inventory costing method that reports the earliest costs in ending inventory is

Accepted Answer

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

Question 17

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 gross profit for the sale of May 23 using the FIFO inventory cost method.

Accepted Answer

A)  $108 
B)  $120 
C)  $72 
D)  $180 
A)  $108 
B)  $120 
C)  $72 
D)  $180

Question 18

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

Accepted Answer

A) True 
 B)False

Question 19

The units of an item available for sale during the year were as follows:   ​
There are 19 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost using LIFO.

Accepted Answer

$466 (10 u

Question 20

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 FIFO inventory cost method.

Accepted Answer

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

The inventory costing method that reports the most current prices in ending inventory is

Determine the total value of the merchandise using net realizable value. Item Quantity Selling Price Commission Doll 10 \ 7 \ 2 Horse 5 9 3

If inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

If Beginning Inventory (BI) + Purchases (P) - Ending Inventory (EI) = Cost of Goods Sold (COGS), an equivalent equation can be written as

During periods of decreasing costs, the use of the LIFO method of costing inventory will result in a lower amount of net income than would result from the use of the FIFO method.

The choice of an inventory costing method has no significant impact on the financial statements.

Too much inventory on hand

If the perpetual inventory system is used, the inventory account is debited for purchases of merchandise.

Safeguarding inventory and proper reporting of the inventory in the financial statements are the reasons for controlling the inventory.

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the FIFO perpetual inventory method.

The units of Product Green-2 available for sale during the year were as follows: There are 17 units of the product in the physical inventory at September 30. The periodic inventory system is used. Determine the cost of goods sold by (a) FIFO, (b) LIFO, and (c) average cost methods.

The inventory costing method that reports the earliest costs in ending inventory is

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

The units of an item available for sale during the year were as follows: There are 19 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost using LIFO.

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 inventory costing method that reports the most current prices in ending inventory is

Determine the total value of the merchandise using net realizable value. Item Quantity Selling Price Commission Doll 10 \ 7 \ 2 Horse 5 9 3

If inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

If Beginning Inventory (BI) + Purchases (P) - Ending Inventory (EI) = Cost of Goods Sold (COGS), an equivalent equation can be written as

During periods of decreasing costs, the use of the LIFO method of costing inventory will result in a lower amount of net income than would result from the use of the FIFO method.

The choice of an inventory costing method has no significant impact on the financial statements.

Too much inventory on hand

If the perpetual inventory system is used, the inventory account is debited for purchases of merchandise.

Safeguarding inventory and proper reporting of the inventory in the financial statements are the reasons for controlling the inventory.

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the FIFO perpetual inventory method.

The units of Product Green-2 available for sale during the year were as follows: ​ There are 17 units of the product in the physical inventory at September 30. The periodic inventory system is used. Determine the cost of goods sold by (a) FIFO, (b) LIFO, and (c) average cost methods.

The inventory costing method that reports the earliest costs in ending inventory is

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

The units of an item available for sale during the year were as follows: ​ There are 19 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost using LIFO.

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 Product Green-2 available for sale during the year were as follows: There are 17 units of the product in the physical inventory at September 30. The periodic inventory system is used. Determine the cost of goods sold by (a) FIFO, (b) LIFO, and (c) average cost methods.

The units of an item available for sale during the year were as follows: There are 19 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost using LIFO.