Question 1

The weighted average cost method will always yield results between FIFO and LIFO.

Accepted Answer

A) True 
 B)False

Question 2

During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory?

Accepted Answer

A)  average cost method 
B)  LIFO method 
C)  FIFO method 
D)  cannot tell without more information 
A)  average cost method 
B)  LIFO method 
C)  FIFO method 
D)  cannot tell without more information

Question 3

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 month of May using the LIFO cost method.

Accepted Answer

A)  $348 
B)  $452 
C)  $444 
D)  $356 
A)  $348 
B)  $452 
C)  $444 
D)  $356

Question 4

​The primary objectives of control over inventory are

Accepted Answer

A)  ​safeguarding the inventory from damage and maintaining constant observation of the inventory 
B)  ​reporting inventory in the financial statements 
C)  ​maintaining constant observation of the inventory and reporting inventory in the financial statements 
D)  ​safeguarding inventory from damage and reporting inventory in the financial statements 
A)  ​safeguarding the inventory from damage and maintaining constant observation of the inventory 
B)  ​reporting inventory in the financial statements 
C)  ​maintaining constant observation of the inventory and reporting inventory in the financial statements 
D)  ​safeguarding inventory from damage and reporting inventory in the financial statements

Question 5

During the taking of its physical inventory on December 31, Almond Supplies Company incorrectly counted its inventory as $545,000 instead of the correct amount of $554,000.
(a) Indicate the effects of the misstatement on Almond Supplies Company's balance sheet and income statement for the year ended December 31.
(b) If uncorrected, what would be the effects of the error on next year's balance sheet and income statement?

Accepted Answer

(a) @#IMG-DLM&_TB2281_00 ​
(b) Effects on next yea

Question 6

If the cost of an item of inventory is $60 and the current replacement cost is $75, the amount included in inventory according to the lower of cost or market is

Accepted Answer

A)  $15 
B)  $60 
C)  $75 
D)  $135 
A)  $15 
B)  $60 
C)  $75 
D)  $135

Question 7

Which of the following companies would be more likely to use the specific identification inventory costing method?

Accepted Answer

A)  Gordon's Jewelers 
B)  Lowe's 
C)  Best Buy 
D)  Walmart 
A)  Gordon's Jewelers 
B)  Lowe's 
C)  Best Buy 
D)  Walmart

Question 8

If ending inventory for the year is overstated, stockholders' equity reported on the balance sheet at the end of the year is understated.

Accepted Answer

A) True 
 B)False

Question 9

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

What is the ending inventory balance at the end of the year using the FIFO method?

Accepted Answer

A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,585 
A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,585

Question 12

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 FIFO.
​

Accepted Answer

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

Question 13

The number of days' sales in inventory measures

Accepted Answer

A)  the length of time it takes to acquire, sell, and replace the inventory 
B)  the length of time it takes to acquire and receive payment for the inventory 
C)  the number of days inventory is on hand prior to sale 
D)  the number of days inventory takes to arrive after ordering 
A)  the length of time it takes to acquire, sell, and replace the inventory 
B)  the length of time it takes to acquire and receive payment for the inventory 
C)  the number of days inventory is on hand prior to sale 
D)  the number of days inventory takes to arrive after ordering

Question 14

Determine the total value of the merchandise using net realizable value.
​

Accepted Answer

The answer of Determine the total value of the merchandise...

Question 15

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 LIFO periodic 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 16

A business using the retail method of inventory costing determines that inventory at retail is $2,300,000. If the ratio of cost to retail price is 55%, what is the amount of inventory to be reported on the financial statements?

Accepted Answer

$2,300,000

Question 17

If Addison uses FIFO, the September 30 inventory is

Accepted Answer

A)  $800 
B)  $650 
C)  $750 
D)  $700 
A)  $800 
B)  $650 
C)  $750 
D)  $700

Question 18

Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category. $$\begin{array} { | c | c | r | r | } 
\hline \text { Commodity } & \begin{array} { c } 
\text { Inventory } \
\text { Quantity }
\end{array} & \text { Cost per Unit } &{ \begin{array} { c } 
\text { Market Value } \
\text { per Unit }
\end{array} } \
\hline \text { A } & 35 & \$ 52 & \$ 55 \
\hline \text { B } & 20 & 155 & 150 \
\hline \text { C } & 25 & 82 & 85 \
\hline \text { D } & 40 & 58 & 55 \
\hline
\end{array}$$ What is the amount of reduction in the inventory at April 30 attributable to market decline?

Accepted Answer

A)  $14 
B)  $40 
C)  $180 
D)  $220 
A)  $14 
B)  $40 
C)  $180 
D)  $220

Question 19

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 LIFO 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 20

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

Accepted Answer

A) True 
 B)False

The weighted average cost method will always yield results between FIFO and LIFO.

During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory?

The primary objectives of control over inventory are

If the cost of an item of inventory is $60 and the current replacement cost is $75, the amount included in inventory according to the lower of cost or market is

Which of the following companies would be more likely to use the specific identification inventory costing method?

If ending inventory for the year is overstated, stockholders' equity reported on the balance sheet at the end of the year is understated.

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

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

What is the ending inventory balance at the end of the year using the FIFO 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 FIFO.

The number of days' sales in inventory measures

Determine the total value of the merchandise using net realizable value.

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 LIFO periodic inventory method.

A business using the retail method of inventory costing determines that inventory at retail is $2,300,000. If the ratio of cost to retail price is 55%, what is the amount of inventory to be reported on the financial statements?

If Addison uses FIFO, the September 30 inventory is

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 LIFO perpetual inventory method.

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

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 weighted average cost method will always yield results between FIFO and LIFO.

During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory?

​The primary objectives of control over inventory are

If the cost of an item of inventory is $60 and the current replacement cost is $75, the amount included in inventory according to the lower of cost or market is

Which of the following companies would be more likely to use the specific identification inventory costing method?

If ending inventory for the year is overstated, stockholders' equity reported on the balance sheet at the end of the year is understated.

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

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

What is the ending inventory balance at the end of the year using the FIFO 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 FIFO. ​

The number of days' sales in inventory measures

Determine the total value of the merchandise using net realizable value. ​

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 LIFO periodic inventory method.

A business using the retail method of inventory costing determines that inventory at retail is $2,300,000. If the ratio of cost to retail price is 55%, what is the amount of inventory to be reported on the financial statements?

If Addison uses FIFO, the September 30 inventory is

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 LIFO perpetual inventory method.

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

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 primary objectives of control over inventory are

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 FIFO.

Determine the total value of the merchandise using net realizable value.