A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: $\begin{array}{|l|l|} \hline \text { January 1: } & \text { Beginning balance of } 18 \text { units at } \$ 13 \text { each. } \\ \hline \text { January 12: } & \text { Purchased } 30 \text { units at } \$ 14 \text { each. } \\ \hline \text { January 19: } & \text { Sold } 24 \text { units at } \$ 30 \text { selling price each. } \\ \hline \text { January 20: } & \text { Purchased } 24 \text { units at } \$ 17 \text { each } \\ \hline \text { January 27: } & \text { Sold } 27 \text { units at } \$ 30 \text { selling price each. } \\ \hline \end{array}$ If the ending inventory is reported at $276,which inventory method was used?

A) LIFO method B) FIFO method C) Weighted-average method D) Specific identification method E) Retail inventory method A) LIFO method B) FIFO method C) Weighted-average method D) Specific identification method E) Retail inventory method

A company made the following merchandise purchases and sales during the month of May: $\begin{array}{|l|l|l|l|} \hline\text { May 1 purchased } & 380 & \text { units at } & \$ 15 \text { each } \\ \hline \text { May 5 purchased } & 270 & \text { units at } & \$ 17 \text { each } \\ \hline \text { May 10 sold } & 400 & \text { units at } & \$ 50 \text { each } \\ \hline \text { May 20 purchased } & 300 & \text { units at } & \$ 22 \text { each } \\ \hline \text { May 25 sold } & 400 & \text { units at } & \$ 50 \text { each }\\ \hline \end{array}$ There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

\[\begin{array} { | l | r | } \hline 38

A company sells a climbing kit and uses the periodic inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: $\begin{array}{|l|l|} \hline \text { January 1: } & \text { Beginning balance of } 18 \text { units at } \$ 13 \text { each } \\ \hline \text { January 12: } & \text { Purchased } 30 \text { units at } \$ 14 \text { each } \\ \hline \text { January 19: } & \text { Sold } 24 \text { units at a selling price of } \$ 30 \text { each } \\ \hline \text { January 20: } & \text { Purchased } 24 \text { units at } \$ 17 \text { each } \\ \hline \text { January 27: } & \text { Sold } 27 \text { units at a selling price of } \$ 30 \text { each } \\ \hline \end{array}$ If the ending inventory is reported at $357,what inventory method was used?

A) LIFO B) FIFO C) Weighted average D) Specific identification E) Retail inventory method A) LIFO B) FIFO C) Weighted average D) Specific identification E) Retail inventory method

Exam 5: Inventories and Cost of Sales

Given the following information,determine the cost of goods sold for December 31 using the FIFO perpetual inventory method. December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units were sold at $35 per unit.

(Multiple Choice)

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Question 21

The full disclosure principle:

(Multiple Choice)

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Question 22

A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: January 1: Beginning balance of 18 units at \ 13 each. January 12: Purchased 30 units at \ 14 each. January 19: Sold 24 units at \ 30 selling price each. January 20: Purchased 24 units at \ 17 each January 27: Sold 27 units at \ 30 selling price each. If the ending inventory is reported at $276,which inventory method was used?

(Multiple Choice)

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Question 23

Generally accepted accounting principles require that the inventory of a company be reported at:

(Multiple Choice)

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Question 24

A company made the following merchandise purchases and sales during the month of May: May 1 purchased 380 units at \ 15 each May 5 purchased 270 units at \ 17 each May 10 sold 400 units at \ 50 each May 20 purchased 300 units at \ 22 each May 25 sold 400 units at \ 50 each There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

(Essay)

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Question 25

Apply the retail method to the following company information to calculate the cost of the ending inventory for the current period: Cost Retail Beginning inventory \ 20,224 \ 31,600 Net purchases 59,508 97,000 Sales 89,000

(Essay)

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Question 26

A company had inventory on November 1 of 5 units at a cost of $20 each.On November 2,they purchased 10 units at $22 each.On November 6,they purchased 6 units at $25 each.On November 8,8 units were sold for $55 each.Using the LIFO perpetual inventory method,what was the value of the inventory on November 8 after the sale?

(Multiple Choice)

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Question 27

An overstatement of ending inventory will cause an overstatement of assets and an understatement of equity on the balance sheet.

(True/False)

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Question 28

Goods in transit are included in a purchaser's inventory:

(Multiple Choice)

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Question 29

The conservatism constraint:

(Multiple Choice)

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Question 30

In applying the lower of cost or market method to inventory valuation,market is defined as:

(Multiple Choice)

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Question 31

Given the following information,determine the cost of goods sold at November 30 using the weighted-average perpetual inventory method. November 3: 15 units were purchased at $8 per unit. November 11: 18 units were purchased at $9.50 per unit. November 15: 15 units were sold at $45 per unit. November 18: 30 units were purchased at $10.75 per unit. November 30: 20 units were sold at $55 per.

(Essay)

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Question 32

Toys "R" Us had cost of goods sold of $8,321 million and ending inventory of $2,027 million.Based on this,its days' sales in inventory is equal to 89 days.

(True/False)

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Question 33

A company had inventory of 5 units at a cost of $20 each on November 1.On November 2,they purchased 10 units at $22 each.On November 6,they purchased 6 units at $25 each.On November 8,they sold 18 units for $54 each.Using the LIFO perpetual inventory method,what was the cost of the 18 units sold?

(Multiple Choice)

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Question 34

The conservatism constraint requires that when more than one estimate of the amounts that are to be received or paid in the future exist and these estimates are about equally likely,then the less optimistic amount is used.

(True/False)

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Question 35

The matching principle requires that the inventory valuation method follow the physical flow of inventory.

(True/False)

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Question 36

A company reported the following data related to its ending inventory: Product Units Available Cost Market 849 100 \ 10 \ 11 842 75 16 14 847 60 14 13 860 40 16 20 Calculate the lower of cost or-market on both the: (a)Inventory as a whole. (b)Inventory applied separately to each product.

(Essay)

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Question 37

LIFO is the preferred inventory costing method when costs are rising and managers have incentives to report higher income.When income is higher,managers may earn bonuses and have more job security and a better reputation.

(True/False)

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Question 38

A company sells a climbing kit and uses the periodic inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: January 1: Beginning balance of 18 units at \ 13 each January 12: Purchased 30 units at \ 14 each January 19: Sold 24 units at a selling price of \ 30 each January 20: Purchased 24 units at \ 17 each January 27: Sold 27 units at a selling price of \ 30 each If the ending inventory is reported at $357,what inventory method was used?

(Multiple Choice)

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Question 39

Not many companies take a physical count of inventory each year as they rely primarily on inventory records alone to determine the inventory value.

(True/False)

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Question 40

Exam 5: Inventories and Cost of Sales

The full disclosure principle:

Generally accepted accounting principles require that the inventory of a company be reported at:

Apply the retail method to the following company information to calculate the cost of the ending inventory for the current period: Cost Retail Beginning inventory \ 20,224 \ 31,600 Net purchases 59,508 97,000 Sales 89,000

An overstatement of ending inventory will cause an overstatement of assets and an understatement of equity on the balance sheet.

Goods in transit are included in a purchaser's inventory:

The conservatism constraint:

In applying the lower of cost or market method to inventory valuation,market is defined as:

Toys "R" Us had cost of goods sold of $8,321 million and ending inventory of $2,027 million.Based on this,its days' sales in inventory is equal to 89 days.

A company had inventory of 5 units at a cost of $20 each on November 1.On November 2,they purchased 10 units at $22 each.On November 6,they purchased 6 units at $25 each.On November 8,they sold 18 units for $54 each.Using the LIFO perpetual inventory method,what was the cost of the 18 units sold?

The conservatism constraint requires that when more than one estimate of the amounts that are to be received or paid in the future exist and these estimates are about equally likely,then the less optimistic amount is used.

The matching principle requires that the inventory valuation method follow the physical flow of inventory.

A company reported the following data related to its ending inventory: Product Units Available Cost Market 849 100 \ 10 \ 11 842 75 16 14 847 60 14 13 860 40 16 20 Calculate the lower of cost or-market on both the: (a)Inventory as a whole. (b)Inventory applied separately to each product.

LIFO is the preferred inventory costing method when costs are rising and managers have incentives to report higher income.When income is higher,managers may earn bonuses and have more job security and a better reputation.

Not many companies take a physical count of inventory each year as they rely primarily on inventory records alone to determine the inventory value.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Accounting With Special Journals

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Filters