Question 1

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 2

​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 3

Based upon the following data,estimate the cost of ending inventory using the gross profit method.

Accepted Answer

The answer of Based upon the following data,estimate the cost...

Question 4

Based on the following data,calculate the estimated cost of the inventory on March 31 using the retail method.

Accepted Answer

The answer of Based on the following data,calculate the estimated...

Question 5

The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined.

Accepted Answer

A) True 
 B)False

Question 6

Inventory errors,if not discovered,will self-correct within two years.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

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

Question 8

During times of rising prices,which of the following is not an accurate statement?

Accepted Answer

A)  Average costing will yield results that are between those of FIFO and LIFO. 
B)  LIFO will result in a higher cost of goods sold than FIFO. 
C)  FIFO will result in a higher net income than LIFO. 
D)  LIFO will result in higher income taxes than FIFO. 
A)  Average costing will yield results that are between those of FIFO and LIFO. 
B)  LIFO will result in a higher cost of goods sold than FIFO. 
C)  FIFO will result in a higher net income than LIFO. 
D)  LIFO will result in higher income taxes than FIFO.

Question 9

Ending inventory is made up of the oldest purchases when a company uses

Accepted Answer

A)  first-in,first-out 
B)  last-in,first-out 
C)  average cost 
D)  retail method 
A)  first-in,first-out 
B)  last-in,first-out 
C)  average cost 
D)  retail method

Question 10

It's not unusual for large companies to use different inventory costing methods for different segments of its inventory.

Accepted Answer

A) True 
 B)False

Question 11

When merchandise sold is assumed to be in the order in which the purchases were made,the company is using

Accepted Answer

A)  first-in,last-out 
B)  last-in,first-out 
C)  first-in,first-out 
D)  average cost 
A)  first-in,last-out 
B)  last-in,first-out 
C)  first-in,first-out 
D)  average cost

Question 12

Beginning inventory,purchases,and sales for an inventory item are as follows:
​
​
   The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year.What is the total cost of ending inventory according to LIFO?

Accepted Answer

($755 × 30 units)+ (

Question 13

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 14

What is the amount of the inventory at the end of the year rounded to nearest dollar using the average cost method?

Accepted Answer

A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,705 
A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,705

Question 15

When using a perpetual inventory system,the journal entry to record the cost of goods sold is:

Accepted Answer

A)  debit Cost of Goods Sold; credit Sales 
B)  debit Cost of Goods Sold; credit Inventory 
C)  debit Inventory; credit Cost of Goods Sold 
D)  No journal entry is made to record the cost of goods sold. 
A)  debit Cost of Goods Sold; credit Sales 
B)  debit Cost of Goods Sold; credit Inventory 
C)  debit Inventory; credit Cost of Goods Sold 
D)  No journal entry is made to record the cost of goods sold.

Question 16

During periods of rapidly rising costs,the use of the LIFO method results in illusory or inventory profits.

Accepted Answer

A) True 
 B)False

Question 17

A purchase order establishes an initial record of the receipt of the inventory.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique,high-cost items?

Accepted Answer

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

Question 19

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 20

Inventory turnover measures the length of time it takes to acquire,sell,and replace the inventory.

Accepted Answer

A) True 
 B)False

Exam 6: Inventories

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 primary objectives of control over inventory are

Based upon the following data,estimate the cost of ending inventory using the gross profit method.

Based on the following data,calculate the estimated cost of the inventory on March 31 using the retail method.

The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined.

Inventory errors,if not discovered,will self-correct within two years.

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

During times of rising prices,which of the following is not an accurate statement?

Ending inventory is made up of the oldest purchases when a company uses

It's not unusual for large companies to use different inventory costing methods for different segments of its inventory.

When merchandise sold is assumed to be in the order in which the purchases were made,the company is using

Beginning inventory,purchases,and sales for an inventory item are as follows: ​ ​ The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year.What is the total cost of ending inventory according to LIFO?

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

What is the amount of the inventory at the end of the year rounded to nearest dollar using the average cost method?

When using a perpetual inventory system,the journal entry to record the cost of goods sold is:

During periods of rapidly rising costs,the use of the LIFO method results in illusory or inventory profits.

A purchase order establishes an initial record of the receipt of the inventory.

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique,high-cost items?

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?

Inventory turnover measures the length of time it takes to acquire,sell,and replace the inventory.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising 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

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

The primary objectives of control over inventory are

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

Beginning inventory,purchases,and sales for an inventory item are as follows: The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year.What is the total cost of ending inventory according to LIFO?