Question 1

Goods in transit shipped FOB destination should not be included in the buyer's ending inventory.

Accepted Answer

A) True 
 B)False

Question 2

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 3

A manufacturer's inventory consists of raw materials,work in process,and finished goods.

Accepted Answer

A) True 
 B)False

Question 4

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. )
Assuming that a periodic inventory system is used

Accepted Answer

a.Average-cost: $2,240 ($5,600

Question 5

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Accepted Answer

A) True 
 B)False

Question 6

Use this information to answer the following question.   Assuming that the specific identification method is used and that ending inventory consists of 15 units from each of the three purchases and five units from the January 1 inventory,cost of goods sold is

Accepted Answer

A) $221. 
B) $418. 
C) $338. 
D) $445. 
A) $221. 
B) $418. 
C) $338. 
D) $445.

Question 7

In a period of rising prices,which of the following inventory methods generally results in the highest gross margin figure?

Accepted Answer

A) Cannot tell without more information 
B) LIFO 
C) FIFO 
D) Average-cost 
A) Cannot tell without more information 
B) LIFO 
C) FIFO 
D) Average-cost

Question 8

Use the following information to calculate ending inventory on (a)a LIFO basis, (b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system.

Accepted Answer

a.LIFO: 50 × $28 = $1,400.00
b.FIFO: (5

Question 9

Inventory turnover is expressed in terms of

Accepted Answer

A) days. 
B) a percentage. 
C) dollars. 
D) times. 
A) days. 
B) a percentage. 
C) dollars. 
D) times.

Question 10

Which costing method is based on the reasoning that the fairest determination of income occurs if the current costs are matched against current sales prices?

Accepted Answer

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

Question 11

Use this information to answer the following question.   A periodic inventory system is used.
Using LIFO,cost of goods sold is

Accepted Answer

A) $3,480. 
B) $8,928. 
C) $2,664. 
D) $8,112. 
A) $3,480. 
B) $8,928. 
C) $2,664. 
D) $8,112.

Question 12

Use this inventory information for the month of August to answer the following question.   Assuming that a perpetual inventory system is used.
-What is ending inventory on a FIFO basis?

Accepted Answer

A) $3,904 
B) $3,984 
C) $4,024 
D) More information is needed. 
A) $3,904 
B) $3,984 
C) $4,024 
D) More information is needed.

Question 13

Use this information to answer the following question.   
-A periodic inventory system is used;ending inventory is 140 units.
What is cost of goods sold under FIFO?

Accepted Answer

A) $1,760 
B) $3,160 
C) $2,160 
D) $4,160 
A) $1,760 
B) $3,160 
C) $2,160 
D) $4,160

Question 14

Use this information to answer the following question.   
A periodic inventory system is used.
-Using LIFO,the cost assigned to ending inventory is

Accepted Answer

A) $3,480. 
B) $8,112. 
C) $2,664. 
D) $8,928. 
A) $3,480. 
B) $8,112. 
C) $2,664. 
D) $8,928.

Question 15

The FIFO inventory method does not produce the most up-to-date figure for ending inventory.

Accepted Answer

A) True 
 B)False

Question 16

Use this information to answer the following question.   
-A periodic inventory system is used;ending inventory is 147 units.
What is ending inventory under FIFO?

Accepted Answer

A) $1,382 
B) $1,582 
C) $1,282 
D) $1,482 
A) $1,382 
B) $1,582 
C) $1,282 
D) $1,482

Question 17

In accounting for inventory,the assumed cost flow need not match the physical goods flow.

Accepted Answer

A) True 
 B)False

Question 18

Periodic and perpetual are examples of inventory costing systems.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following costs usually would not be included in the inventory cost?

Accepted Answer

A) Storage costs 
B) Related tariffs 
C) Invoice price less purchases discounts 
D) Insurance on goods in transit 
A) Storage costs 
B) Related tariffs 
C) Invoice price less purchases discounts 
D) Insurance on goods in transit

Question 20

Cost of goods sold equals $250,000,and average inventory equals $100,000.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.

Exam 6: Inventories

Goods in transit shipped FOB destination should not be included in the buyer's ending inventory.

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

A manufacturer's inventory consists of raw materials,work in process,and finished goods.

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. ) Assuming that a periodic inventory system is used

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Use this information to answer the following question. Assuming that the specific identification method is used and that ending inventory consists of 15 units from each of the three purchases and five units from the January 1 inventory,cost of goods sold is

In a period of rising prices,which of the following inventory methods generally results in the highest gross margin figure?

Use the following information to calculate ending inventory on (a)a LIFO basis, (b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system.

Inventory turnover is expressed in terms of

Which costing method is based on the reasoning that the fairest determination of income occurs if the current costs are matched against current sales prices?

Use this information to answer the following question. A periodic inventory system is used. Using LIFO,cost of goods sold is

Use this inventory information for the month of August to answer the following question. Assuming that a perpetual inventory system is used. -What is ending inventory on a FIFO basis?

Use this information to answer the following question. -A periodic inventory system is used;ending inventory is 140 units. What is cost of goods sold under FIFO?

Use this information to answer the following question. A periodic inventory system is used. -Using LIFO,the cost assigned to ending inventory is

The FIFO inventory method does not produce the most up-to-date figure for ending inventory.

Use this information to answer the following question. -A periodic inventory system is used;ending inventory is 147 units. What is ending inventory under FIFO?

In accounting for inventory,the assumed cost flow need not match the physical goods flow.

Periodic and perpetual are examples of inventory costing systems.

Which of the following costs usually would not be included in the inventory cost?

Cost of goods sold equals $250,000,and average inventory equals $100,000.Days' inventory on hand equals

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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