Question 1

Ending merchandise inventory for LIFO will be the same dollar amount under a periodic inventory system as under a perpetual inventory system.

Accepted Answer

A) True 
 B)False

Question 2

Indirect materials and indirect labor are components of manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 3

All of the following are inventory costing methods except

Accepted Answer

A)  first-in, first-out. 
B)  average-cost. 
C)  periodic. 
D)  specific identification. 
A)  first-in, first-out. 
B)  average-cost. 
C)  periodic. 
D)  specific identification.

Question 4

Inventory costing methods place primary reliance on assumptions about the flow of

Accepted Answer

A)  costs. 
B)  goods. 
C)  resale prices. 
D)  values. 
A)  costs. 
B)  goods. 
C)  resale prices. 
D)  values.

Question 5

The average-cost method relies on a simple average calculation.

Accepted Answer

A) True 
 B)False

Question 6

Given equal circumstances,which inventory method probably would be the most time consuming?

Accepted Answer

A)  Specific identification 
B)  FIFO 
C)  Average-cost 
D)  LIFO 
A)  Specific identification 
B)  FIFO 
C)  Average-cost 
D)  LIFO

Question 7

Use this inventory information for the month of May to answer the following question. $$\begin{array} { r r l l } 
\text { May } &1& \text { Begnning inventory } & \text { 20 units @ } 76 \
& 7 & \text { Purchase } & 70 \text { units @ } \$ 80 \
&18 & \text { Sale } & 25 \text { units } \
&22 & \text { purchase } & 10 \text { units @ } \$ 88 \
&29 & \text { Sale } & 40 \text { units }
\end{array}$$
 Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

Accepted Answer

A)  $2,880 
B)  $5,120 
C)  $5,200 
D)  $2,800 
A)  $2,880 
B)  $5,120 
C)  $5,200 
D)  $2,800

Question 8

When taking a physical inventory under the retail method,it is necessary to know only the quantity of items on hand.

Accepted Answer

A) True 
 B)False

Question 9

Cost of goods sold equals $500,000,and average inventory equals $200,000.Days' inventory on hand equals

Accepted Answer

A)  91.3 days. 
B)  146.0 days. 
C)  821.9 days. 
D)  912.5 days. 
A)  91.3 days. 
B)  146.0 days. 
C)  821.9 days. 
D)  912.5 days.

Question 10

Which of the following inventory methods when used for income tax purposes must also be used for reporting purposes?

Accepted Answer

A)  Specific identification 
B)  LIFO 
C)  FIFO 
D)  Average-cost 
A)  Specific identification 
B)  LIFO 
C)  FIFO 
D)  Average-cost

Question 11

Use this inventory information for the month of May to answer the following question. $$\begin{array} { r r l l } 
\text { May } &1& \text { Begnning inventory } & \text { 20 units @ } 76 \
& 7 & \text { Purchase } & 70 \text { units @ } \$ 80 \
&18 & \text { Sale } & 25 \text { units } \
&22 & \text { purchase } & 10 \text { units @ } \$ 88 \
&29 & \text { Sale } & 40 \text { units }
\end{array}$$
 What is ending inventory under the specific identification method?

Accepted Answer

A)  $2,720 
B)  $2,800 
C)  More information is needed. 
D)  $2,880 
A)  $2,720 
B)  $2,800 
C)  More information is needed. 
D)  $2,880

Question 12

Which of the following companies would be most likely to use the retail method?

Accepted Answer

A)  A dealer in heavy machinery 
B)  A TV repair company 
C)  A women's dress shop 
D)  A farm supply company 
A)  A dealer in heavy machinery 
B)  A TV repair company 
C)  A women's dress shop 
D)  A farm supply company

Question 13

Which inventory method generally results in the most realistic ending inventory figure?

Accepted Answer

A)  FIFO 
B)  Whichever method produces the highest ending inventory figure 
C)  LIFO 
D)  Average-cost 
A)  FIFO 
B)  Whichever method produces the highest ending inventory figure 
C)  LIFO 
D)  Average-cost

Question 14

Goods held on consignment are

Accepted Answer

A)  kept for sale on the premises of the consignor. 
B)  included as part of no one's ending inventory. 
C)  never owned by the consignee. 
D)  included in the consignee's ending inventory. 
A)  kept for sale on the premises of the consignor. 
B)  included as part of no one's ending inventory. 
C)  never owned by the consignee. 
D)  included in the consignee's ending inventory.

Question 15

Use this information to answer the following question. $\begin{array}{llll}
\text { Feb. } & 1 & \text { Inventory } & 200 \text { units @ } \$ 6.00 \
& 6 & \text { Purchase } & 300 \text { units } @ \$ 6.60\
&13 & \text { Purchase } & 100 \text { units } @ \$ 7.20 \
&20 & \text { Purchase } & 200 \text { units } @ \$ 7.80 \
&25 & \text { Purchase } & 40 \text { units @ } \$ 8.40 \
&&\text { Total sales }& 620 \text { units }
\end{array}$

A periodic inventory system is used.
Using LIFO,cost of goods sold is

Accepted Answer

A)  $1,740. 
B)  $4,464. 
C)  $1,332. 
D)  $4,056. 
A)  $1,740. 
B)  $4,464. 
C)  $1,332. 
D)  $4,056.

Question 16

During periods of consistently falling prices,the FIFO inventory method will produce the highest possible amount of net income.

Accepted Answer

A) True 
 B)False

Question 17

How is the matching rule applied when accounting for merchandise inventory?

Accepted Answer

Merchandise inventory is classified as a

Question 18

Periodic and perpetual are examples of inventory costing systems.

Accepted Answer

A) True 
 B)False

Question 19

Goods in transit shipped FOB destination should be included in the buyer's ending inventory.

Accepted Answer

A) True 
 B)False

Question 20

Use this information to answer the following question. $\begin{array}{llll}
\text { Jan. } & 1 & \text { Inventory } &15 \text { units @ } \$4.00 \
& 8 & \text { Purchase } & 60 \text { units } @ \$ 4.40\
&17 & \text { Purchase } & 30 \text { units } @ \$ 4.20 \
&25 & \text { Purchase } & 45 \text { units @ } \$ 8.40 \
&&\text { Total sales }& 100 \text { units }
\end{array}$

A periodic inventory system is used.
Cost of goods sold under the average-cost method is

Accepted Answer

A)  $444. 
B)  $333. 
C)  $435. 
D)  $222. 
A)  $444. 
B)  $333. 
C)  $435. 
D)  $222.

Exam 6: Inventories

Ending merchandise inventory for LIFO will be the same dollar amount under a periodic inventory system as under a perpetual inventory system.

Indirect materials and indirect labor are components of manufacturing overhead.

All of the following are inventory costing methods except

Inventory costing methods place primary reliance on assumptions about the flow of

The average-cost method relies on a simple average calculation.

Given equal circumstances,which inventory method probably would be the most time consuming?

When taking a physical inventory under the retail method,it is necessary to know only the quantity of items on hand.

Cost of goods sold equals $500,000,and average inventory equals $200,000.Days' inventory on hand equals

Which of the following inventory methods when used for income tax purposes must also be used for reporting purposes?

Use this inventory information for the month of May to answer the following question. May 1 Begnning inventory 20 units @ 76 7 Purchase 70 units @ \ 80 18 Sale 25 units 22 purchase 10 units @ \ 88 29 Sale 40 units What is ending inventory under the specific identification method?

Which of the following companies would be most likely to use the retail method?

Which inventory method generally results in the most realistic ending inventory figure?

Goods held on consignment are

During periods of consistently falling prices,the FIFO inventory method will produce the highest possible amount of net income.

How is the matching rule applied when accounting for merchandise inventory?

Periodic and perpetual are examples of inventory costing systems.

Goods in transit shipped FOB destination should be included in the buyer's ending inventory.

Use this information to answer the following question. Jan. 1 Inventory 15 units @ \4 .00 8 Purchase 60 units @\ 4.40 17 Purchase 30 units @\ 4.20 25 Purchase 45 units @ \ 8.40 Total sales 100 units A periodic inventory system is used. Cost of goods sold under the average-cost method is

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions,incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

Filters