Question 1

The ending inventory balance represents

Accepted Answer

A) expired costs and is reported on the balance sheet as an asset. 
B) the cost of goods sold during the current period and is reported on the balance sheet as an asset. 
C) expired costs and is reported on the income statement as an expense. 
D) unexpired costs and is reported on the balance sheet as an asset. 
A) expired costs and is reported on the balance sheet as an asset. 
B) the cost of goods sold during the current period and is reported on the balance sheet as an asset. 
C) expired costs and is reported on the income statement as an expense. 
D) unexpired costs and is reported on the balance sheet as an asset.

Question 2

Which inventory costing method assigns the cost of the most recent items purchased to cost of goods sold?

Accepted Answer

A) Specific identification 
B) Weighted average cost 
C) FIFO 
D) LIFO 
A) Specific identification 
B) Weighted average cost 
C) FIFO 
D) LIFO

Question 3

An error in assigning the proper amount to inventory on the balance sheet will affect the amount recognized as __________ on the income statement

Accepted Answer

cost of go

Question 4

The inventory of a(n)__________ consists of three distinct types of costs: direct materials,direct labor,and manufacturing overhead.

Accepted Answer

The answer of The inventory of a(n)__________ consists of three...

Question 5

Share,Inc.
The following data is available for one of the products sold by Share,Inc. ,which uses a perpetual inventory system.
 May 1$\quad $ On hand, 10 units $@ \$ 2$ each
8$\quad $ Sold 6 units@$10 each
14$\quad $ Purchased 30 units $@ \$ 3$ each
23 $\quad $Sold 24 units $@ \$ 10$ each

-Refer to the data for Share,Inc.
?
If the moving average method is used,how much is ending inventory on May 30?

Accepted Answer

$28.80
($98/34 × 10)

Question 6

George's Department Store
George's Department Store is a merchandising company that uses the periodic inventory system.Selected account balances are listed below:
 $$\begin{array} { l r } 
\text { Sales } & \$ 200,000 \
\text { Purchases } & 90,000 \
\text { Inventory (beginning) } & 23,000 \
\text { Inventory (ending) } & 17,000 \
\text { Purchase returns and allowances } & 3,000 \
\text { Purchase discounts } & 7,000 \
\text { Transportation-in } & 4,000 \
\text { Sales discounts } & 8,000 \
\text { Sales returns and allowances } & 5,000
\end{array}$$
-Refer to the account information for George's Department Store. Calculate cost of goods purchased.

Accepted Answer

A) $ 84,000 
B) $ 90,000 
C) $ 103,000 
D) $ 117,000 
A) $ 84,000 
B) $ 90,000 
C) $ 103,000 
D) $ 117,000

Question 7

The following information is reported in the Operating Activities category of Gateway's statement of cash flows for 2017: ?
$$\begin{array} { l r } 
\text { Net income } & \$ 1,200,000 \
\text { Increase in inventories } & 600,000 \
\text { Decrease in accounts payable related to inventories } & 400,000
\end{array}$$ Which one of the following conclusions can be assumed from the information provided?

Accepted Answer

A) Gateway used the direct method to determine cash flows from operating activities. 
B) Gateway purchased more merchandise than it sold in 2017. 
C) Cash payments for merchandise purchases were less than the amount of merchandise purchased on credit during 2017. 
D) Cash payments for merchandise exceeded cost of goods sold by $200,000. 
A) Gateway used the direct method to determine cash flows from operating activities. 
B) Gateway purchased more merchandise than it sold in 2017. 
C) Cash payments for merchandise purchases were less than the amount of merchandise purchased on credit during 2017. 
D) Cash payments for merchandise exceeded cost of goods sold by $200,000.

Question 8

Caruso,Inc.has an inventory turnover ratio of 8 times.If its cost of goods sold is $150,000,then

Accepted Answer

A) the company will report sales of $1,200,000. 
B) the gross margin will be $1,200,000. 
C) the company's average inventory is $18,750. 
D) it sells its inventory 1,200 times per year. 
A) the company will report sales of $1,200,000. 
B) the gross margin will be $1,200,000. 
C) the company's average inventory is $18,750. 
D) it sells its inventory 1,200 times per year.

Question 9

At the year-end inventory count,if goods in transit are shipped FOB shipping point,they should be included in the inventory count of

Accepted Answer

A) the seller. 
B) the buyer. 
C) both the seller and the buyer. 
D) neither the seller nor the buyer. 
A) the seller. 
B) the buyer. 
C) both the seller and the buyer. 
D) neither the seller nor the buyer.

Question 10

Specific identification relies on matching unit costs with the actual units sold.

Accepted Answer

A) True 
 B)False

Question 11

The effect of a misstatement of the year-end inventory is limited to the net income for that year.

Accepted Answer

A) True 
 B)False

Question 12

If cost of goods sold does not equal the cost of merchandise purchased during the period,an adjustment must be made to correct the error.

Accepted Answer

A) True 
 B)False

Question 13

Under LIFO,the units in the ending inventory represent the most recent purchase of the period.

Accepted Answer

A) True 
 B)False

Question 14

A company fails to record one storeroom full of inventory in its year-end inventory records.As a result,this will cause an

Accepted Answer

A) overstatement of inventory on the year-end balance sheet. 
B) understatement of gross profit in the following year. 
C) overstatement of retained earnings at the end of the year. 
D) overstatement of cost of goods sold for the current year. 
A) overstatement of inventory on the year-end balance sheet. 
B) understatement of gross profit in the following year. 
C) overstatement of retained earnings at the end of the year. 
D) overstatement of cost of goods sold for the current year.

Question 15

Roki Inc.uses the periodic inventory system and has the following data for the month of June:  
$$\begin{array} { r l r } 
\text { June } & 1\quad \text { On hand, 50 units } @ \$ 15.00 \text { each } & 750.00\
&5\quad  \text { Purchased 115 units } \$ 15.10 \text { each } &  1,736.50 \
&14 \quad \text { Purchased } 75 \text { units } @ \$ 15.20 \text { each } &1,140.00  \
&\quad \text { Total cost of goods avalable for sale } &\$ 3,626.50 \
&30\quad \text { On hand, 90 units } &  \ 
&
\end{array}$$

- If the June 30 inventory included 45 units from the June 5 purchase and 45 units from the June 14 purchase,Roki's cost of goods sold for June under the specific identification method would be

Accepted Answer

A) $2,263.00. 
B) $2.373.00. 
C) $2,945.00. 
D) $3,626.50. 
A) $2,263.00. 
B) $2.373.00. 
C) $2,945.00. 
D) $3,626.50.

Question 16

A company began the year with $150,000 in inventory and ended the year with $170,000 in inventory.Cost of goods sold for the year amounted to $960,000.Assuming 360 days in a year,how long,on average,does it take the company to sell its inventory (to the nearest day)?

Accepted Answer

A) 6 days 
B) 60 days 
C) 120 days 
D) 3 days 
A) 6 days 
B) 60 days 
C) 120 days 
D) 3 days

Question 17

What is LIFO inventory liquidation? Why is it important to disclose the effects of a LIFO inventory liquidation?

Accepted Answer

A LIFO liquidation means that some of th

Question 18

Park,Inc.purchased merchandise from Jay Zee Music Company on June 5,2017.The goods were shipped the same day.The merchandise's selling price was $15,000.The credit terms were 1/10,n/30.The shipping terms were FOB shipping point.Park received the merchandise on June 10,2017.Park paid the amount due on June 13,2017. 
-
Who is responsible for payment of the transportation costs on the merchandise sold by Jay Zee Music to Park?

Accepted Answer

A) Jay Zee Music Company 
B) Park,Inc. 
C) Split equally between the two companies 
D) Cannot be determined from the information provided 
A) Jay Zee Music Company 
B) Park,Inc. 
C) Split equally between the two companies 
D) Cannot be determined from the information provided

Question 19

Park,Inc.purchased merchandise from Jay Zee Music Company on June 5,2017.The goods were shipped the same day.The merchandise's selling price was $15,000.The credit terms were 1/10,n/30.The shipping terms were FOB shipping point.Park received the merchandise on June 10,2017.Park paid the amount due on June 13,2017.
-
When did title to the merchandise transfer from Jay Zee Music Company to Park?

Accepted Answer

A) June 5,2017 
B) June 10,2017 
C) June 13,2017 
D) Cannot be determined from the information provided 
A) June 5,2017 
B) June 10,2017 
C) June 13,2017 
D) Cannot be determined from the information provided

Question 20

Digital Forces
Selected data from the financial statements for Digital Forces is presented below.
 $$\begin{array} { l r } 
\text { Net sales-2017 } & \$ 200,000 \
\text { Cost of sal es-2017 } & 136,000 \
\text { Selling and Administrative Expenses-2017 } & 63,000 \
\text { Other operating Expenses-2017 } & 600 \
\text { Income taxes-2017 } & 3,000 \
\text { Inventories-December 31,2016 } & 11,000 \
\text { Inventories-December 31,2017 } & 13,000 \
\text { Retained Earnings-December 31,2017 } & 39,000
\end{array}$$
-Refer to the financial statement information for Digital Forces.
Determine the dollar amount of cost of goods purchased for Digital Forces for 2017.

Accepted Answer

$136,000 (Cost of sales-2017)+

The ending inventory balance represents

Which inventory costing method assigns the cost of the most recent items purchased to cost of goods sold?

An error in assigning the proper amount to inventory on the balance sheet will affect the amount recognized as __________ on the income statement

The inventory of a(n)__________ consists of three distinct types of costs: direct materials,direct labor,and manufacturing overhead.

Caruso,Inc.has an inventory turnover ratio of 8 times.If its cost of goods sold is $150,000,then

At the year-end inventory count,if goods in transit are shipped FOB shipping point,they should be included in the inventory count of

Specific identification relies on matching unit costs with the actual units sold.

The effect of a misstatement of the year-end inventory is limited to the net income for that year.

If cost of goods sold does not equal the cost of merchandise purchased during the period,an adjustment must be made to correct the error.

Under LIFO,the units in the ending inventory represent the most recent purchase of the period.

A company fails to record one storeroom full of inventory in its year-end inventory records.As a result,this will cause an

A company began the year with $150,000 in inventory and ended the year with $170,000 in inventory.Cost of goods sold for the year amounted to $960,000.Assuming 360 days in a year,how long,on average,does it take the company to sell its inventory (to the nearest day)?

What is LIFO inventory liquidation? Why is it important to disclose the effects of a LIFO inventory liquidation?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 5: Inventories and Cost of Goods Sold

The ending inventory balance represents

Which inventory costing method assigns the cost of the most recent items purchased to cost of goods sold?

An error in assigning the proper amount to inventory on the balance sheet will affect the amount recognized as __________ on the income statement

The inventory of a(n)__________ consists of three distinct types of costs: direct materials,direct labor,and manufacturing overhead.

Caruso,Inc.has an inventory turnover ratio of 8 times.If its cost of goods sold is $150,000,then

At the year-end inventory count,if goods in transit are shipped FOB shipping point,they should be included in the inventory count of

Specific identification relies on matching unit costs with the actual units sold.

The effect of a misstatement of the year-end inventory is limited to the net income for that year.

If cost of goods sold does not equal the cost of merchandise purchased during the period,an adjustment must be made to correct the error.

Under LIFO,the units in the ending inventory represent the most recent purchase of the period.

A company fails to record one storeroom full of inventory in its year-end inventory records.As a result,this will cause an

A company began the year with $150,000 in inventory and ended the year with $170,000 in inventory.Cost of goods sold for the year amounted to $960,000.Assuming 360 days in a year,how long,on average,does it take the company to sell its inventory (to the nearest day)?

What is LIFO inventory liquidation? Why is it important to disclose the effects of a LIFO inventory liquidation?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters