Question 1

Use of the retail inventory method requires taking a physical count of inventory.

Accepted Answer

A) True 
 B)False

Question 2

If the estimated rate of gross profit is 30%,what is the estimated cost of the inventory on September 30,based on the following data? ​

Accepted Answer

A)  $320,000 
B)  $192,500 
C)  $275,000 
D)  $105,000 
A)  $320,000 
B)  $192,500 
C)  $275,000 
D)  $105,000

Question 3

A physical inventory should be taken at the end of every month.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

Accepted Answer

A)  inventory turnover only 
B)  number of days' sales in inventory only 
C)  both inventory turnover and number of days' sales in inventory 
D)  neither inventory turnover or number of days' sales in inventory 
A)  inventory turnover only 
B)  number of days' sales in inventory only 
C)  both inventory turnover and number of days' sales in inventory 
D)  neither inventory turnover or number of days' sales in inventory

Question 5

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:
​

Accepted Answer

The answer of The following data regarding purchases and sales...

Question 6

What is the amount of cost of goods sold for the year according to the FIFO method?

Accepted Answer

A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250 
A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250

Question 7

The inventory method that assigns the most recent costs to cost of goods sold is

Accepted Answer

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

Question 8

The firm uses the periodic system,and there are 20 units of the commodity on hand at the end of the year.What is the amount of inventory at the end of the year according to the FIFO method?

Accepted Answer

A)  $655 
B)  $620 
C)  $690 
D)  $659 
A)  $655 
B)  $620 
C)  $690 
D)  $659

Question 9

The units of Product Green-2 available for sale during the year were as follows:
​
   There are 17 units of the product in the physical inventory at September 30.The periodic inventory system is used.Determine the cost of goods sold by (a)FIFO,(b)LIFO,and (c)average cost methods.

Accepted Answer

The answer of The units of Product Green-2 available for...

Question 10

Under the periodic inventory system,the inventory account continuously discloses the amount of inventory on hand.

Accepted Answer

A) True 
 B)False

Question 11

The method of estimating inventory that uses records of the selling prices of the merchandise is called

Accepted Answer

A)  retail method 
B)  gross profit method 
C)  inventory turnover method 
D)  average cost method 
A)  retail method 
B)  gross profit method 
C)  inventory turnover method 
D)  average cost method

Question 12

Stevens Company started the year with an inventory cost of $145,000.During the month of January,Stevens purchased inventory that cost $53,000.January sales totaled $140,000.Estimated gross profit is 35%.The estimated ending inventory as of January 31 is

Accepted Answer

A)  $58,000 
B)  $91,000 
C)  $107,000 
D)  $69,300 
A)  $58,000 
B)  $91,000 
C)  $107,000 
D)  $69,300

Question 13

Garrison Company uses the retail method of inventory costing.It started the year with an inventory that had a retail cost of $45,000.During the year,Garrison purchased an inventory with a retail sales value of $300,000.After performing a physical inventory,Garrison calculated the inventory at retail to be $80,000.The markup is 100% of cost.Determine the ending inventory at its estimated cost. ​

Accepted Answer

A)  $160,000 
B)  $80,000 
C)  $40,000 
D)  $45,000 
A)  $160,000 
B)  $80,000 
C)  $40,000 
D)  $45,000

Question 14

Inventory at the end of the year is overstated.Which of the following statements correctly states the effect of the error?

Accepted Answer

A)  stockholders' equity is overstated 
B)  cost of goods sold is overstated 
C)  gross profit is understated 
D)  net income is understated 
A)  stockholders' equity is overstated 
B)  cost of goods sold is overstated 
C)  gross profit is understated 
D)  net income is understated

Question 15

Beginning inventory,purchases,and sales data for widgets are as follows:
​
   Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of goods sold and ending inventory using LIFO.

Accepted Answer

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

Question 16

If Addison uses LIFO,the cost of the ending inventory on September 30 is

Accepted Answer

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

Question 17

Taking a physical count of inventory

Accepted Answer

A)  is not necessary when a periodic inventory system is used 
B)  should be done near year-end 
C)  has no internal control relevance 
D)  is not necessary when a perpetual inventory system is used 
A)  is not necessary when a periodic inventory system is used 
B)  should be done near year-end 
C)  has no internal control relevance 
D)  is not necessary when a perpetual inventory system is used

Question 18

Assuming that the company uses the perpetual inventory system,determine the ending inventory value for the month of May using the FIFO inventory cost method.

Accepted Answer

A)  $364 
B)  $372 
C)  $324 
D)  $320 
A)  $364 
B)  $372 
C)  $324 
D)  $320

Question 19

The inventory costing method that reports the earliest costs in ending inventory is

Accepted Answer

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

Question 20

The lower of cost or market is a method of inventory valuation.

Accepted Answer

A) True 
 B)False

Exam 6: Inventories

Use of the retail inventory method requires taking a physical count of inventory.

If the estimated rate of gross profit is 30%,what is the estimated cost of the inventory on September 30,based on the following data? ​

A physical inventory should be taken at the end of every month.

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account: ​

What is the amount of cost of goods sold for the year according to the FIFO method?

The inventory method that assigns the most recent costs to cost of goods sold is

The firm uses the periodic system,and there are 20 units of the commodity on hand at the end of the year.What is the amount of inventory at the end of the year according to the FIFO method?

The units of Product Green-2 available for sale during the year were as follows: ​ There are 17 units of the product in the physical inventory at September 30.The periodic inventory system is used.Determine the cost of goods sold by (a)FIFO,(b)LIFO,and (c)average cost methods.

Under the periodic inventory system,the inventory account continuously discloses the amount of inventory on hand.

The method of estimating inventory that uses records of the selling prices of the merchandise is called

Stevens Company started the year with an inventory cost of $145,000.During the month of January,Stevens purchased inventory that cost $53,000.January sales totaled $140,000.Estimated gross profit is 35%.The estimated ending inventory as of January 31 is

Inventory at the end of the year is overstated.Which of the following statements correctly states the effect of the error?

Beginning inventory,purchases,and sales data for widgets are as follows: ​ Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of goods sold and ending inventory using LIFO.

If Addison uses LIFO,the cost of the ending inventory on September 30 is

Taking a physical count of inventory

Assuming that the company uses the perpetual inventory system,determine the ending inventory value for the month of May using the FIFO inventory cost method.

The inventory costing method that reports the earliest costs in ending inventory is

The lower of cost or market is a method of inventory valuation.

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

If the estimated rate of gross profit is 30%,what is the estimated cost of the inventory on September 30,based on the following data?

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:

The units of Product Green-2 available for sale during the year were as follows: There are 17 units of the product in the physical inventory at September 30.The periodic inventory system is used.Determine the cost of goods sold by (a)FIFO,(b)LIFO,and (c)average cost methods.

Beginning inventory,purchases,and sales data for widgets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of goods sold and ending inventory using LIFO.