Question 1

If Beginning Inventory (BI)+ Purchases
(P)- Ending Inventory
(EI)= Cost of Merchandise Sold
(COMS),an equivalent equation can be written as​

Accepted Answer

A) BI + P = COMS - EI 
B) BI - P = COMS + EI 
C) BI + P = COMS + EI 
D) EI + P = COMS - BI 
A) BI + P = COMS - EI 
B) BI - P = COMS + EI 
C) BI + P = COMS + EI 
D) EI + P = COMS - BI C

Question 2

​
Match each description to the appropriate cost flow assumption (a-c).
-Cost of the latest purchases are assigned to ending inventory

Accepted Answer

A) FIFO 
B) LIFO 
C) Weighted average 
A) FIFO 
B) LIFO 
C) Weighted average A

Question 3

"Market" as used in the phrase "lower of cost or market" for valuing inventory,refers to the price at which the inventory is being offered for sale by its owner.

Accepted Answer

A) True 
 B)False  False

Question 4

One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

Accepted Answer

A) True 
 B)False

Question 5

Beginning inventory,purchases,and sales data for hammers are as follows:​   Assuming the business maintains a perpetual inventory system,complete the inventory cards and calculate the cost of merchandise sold and ending inventory under the following assumptions:
(a) First-in,first-out​   (b) Last-in,first-out

Accepted Answer

a.First-in

Question 6

During the taking of its physical inventory on December 31,Almond Supplies Company incorrectly counted its inventory as $545,000 instead of the correct amount of $554,000.Indicate the effects of the misstatement on Almond Supplies Company's balance sheet and income statement for the year ended December 31.

Accepted Answer

The answer of During the taking of its physical inventory...

Question 7

Use the information below to answer the following questions.
​
The following lots of a particular commodity were available for sale during the year:
​
   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 cost of merchandise sold for the year according to the LIFO 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 8

Cost flow is in the order in which costs were incurred when using

Accepted Answer

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

Question 9

Beginning inventory and purchases and sales data for T-shirts are as follows:​   Assuming the business maintains a periodic inventory system,calculate the cost of merchandise sold and ending inventory under the following assumptions: 
a. FIFO
b. LIFO
c. Average cost (round cost of merchandise sold and ending inventory to the nearest dollar)

Accepted Answer

a. FIFO​ @#IMG-DLM&

Question 10

Match each description to the appropriate inventory system (a or b).​
-When using this system,a physical inventory is necessary to determine cost of merchandise sold.

Accepted Answer

A) Perpetual 
B) Periodic 
A) Perpetual 
B) Periodic

Question 11

​
Match each description to the appropriate cost flow assumption (a-c).
-Prohibited under International Financial Reporting Standards 
(IFRS)

Accepted Answer

A) FIFO 
B) LIFO 
C) Weighted average 
A) FIFO 
B) LIFO 
C) Weighted average

Question 12

Match each description to the appropriate cost flow assumption (a-d).
-Cost flow matches the unit sold to the unit purchased.

Accepted Answer

A) Weighted average 
B) First-in, first-out (FIFO) 
C) Last-in, first-out (LIFO) 
D) Specific identification 
A) Weighted average 
B) First-in, first-out (FIFO) 
C) Last-in, first-out (LIFO) 
D) Specific identification

Question 13

The units of an item available for sale during the year were as follows:​   There are 30 units of the item in the physical inventory at December 31.The periodic inventory system is used.Determine the ending inventory cost using FIFO.

Accepted Answer

$1,880 
(2

Question 14

During the taking of its physical inventory on December 31,Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000.The effect on the balance sheet and income statement would be

Accepted Answer

A) assets overstated by $70,000; retained earnings understated by $70,000; and net income statement understated by $70,000 
B) assets overstated by $70,000; retained earnings understated by $70,000; and no effect on the income statement 
C) assets, retained earnings, and net income all overstated by $70,000 
D) assets and retained earnings overstated by $70,000 and net income understated by $70,000 
A) assets overstated by $70,000; retained earnings understated by $70,000; and net income statement understated by $70,000 
B) assets overstated by $70,000; retained earnings understated by $70,000; and no effect on the income statement 
C) assets, retained earnings, and net income all overstated by $70,000 
D) assets and retained earnings overstated by $70,000 and net income understated by $70,000

Question 15

On the basis of the following data,determine the value of the inventory at the lower of cost or market.Apply lower of cost or market to each inventory item.Show your work.

Accepted Answer

The answer of On the basis of the following data,determine...

Question 16

A business using the retail method of inventory costing determines that merchandise 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 17

Match each situation to its impact (a-c) on the current year's net income.
-Merchandise was purchased FOB destination on the last day of the year.The cost of the merchandise purchased was not included in ending inventory.

Accepted Answer

A) Net income for the current year will be overstated. 
B) Net income for the current year will be understated. 
C) There will be no error effect on net income. 
A) Net income for the current year will be overstated. 
B) Net income for the current year will be understated. 
C) There will be no error effect on net income.

Question 18

Kristin's Boutique has identified the following items for possible inclusion in its December 31 inventory.Which of the following would not be included in the year-end inventory?

Accepted Answer

A) Merchandise purchased FOB shipping point was picked up by the freight company but had still not arrived at Kristin's Boutique as of December 31. 
B) Kristin's has in its warehouse merchandise on consignment from Abby Co. 
C) Kristin's has sent merchandise to various retailers on a consignment basis. 
D) Kristin's has merchandise on hand that has been returned by customers because of wrong size. 
A) Merchandise purchased FOB shipping point was picked up by the freight company but had still not arrived at Kristin's Boutique as of December 31. 
B) Kristin's has in its warehouse merchandise on consignment from Abby Co. 
C) Kristin's has sent merchandise to various retailers on a consignment basis. 
D) Kristin's has merchandise on hand that has been returned by customers because of wrong size.

Question 19

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 and taking a physical inventory 
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 and taking a physical inventory 
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 20

If merchandise inventory is being valued at cost and the purchase price is steadily falling,which method of costing will yield the largest net income?

Accepted Answer

A) average cost 
B) LIFO 
C) FIFO 
D) weighted average 
A) average cost 
B) LIFO 
C) FIFO 
D) weighted average

If Beginning Inventory (BI)+ Purchases (P)- Ending Inventory (EI)= Cost of Merchandise Sold (COMS),an equivalent equation can be written as

Match each description to the appropriate cost flow assumption (a-c). -Cost of the latest purchases are assigned to ending inventory

"Market" as used in the phrase "lower of cost or market" for valuing inventory,refers to the price at which the inventory is being offered for sale by its owner.

One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

Cost flow is in the order in which costs were incurred when using

Match each description to the appropriate inventory system (a or b). -When using this system,a physical inventory is necessary to determine cost of merchandise sold.

Match each description to the appropriate cost flow assumption (a-c). -Prohibited under International Financial Reporting Standards (IFRS)

Match each description to the appropriate cost flow assumption (a-d). -Cost flow matches the unit sold to the unit purchased.

The units of an item available for sale during the year were as follows: There are 30 units of the item in the physical inventory at December 31.The periodic inventory system is used.Determine the ending inventory cost using FIFO.

During the taking of its physical inventory on December 31,Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000.The effect on the balance sheet and income statement would be

On the basis of the following data,determine the value of the inventory at the lower of cost or market.Apply lower of cost or market to each inventory item.Show your work.

A business using the retail method of inventory costing determines that merchandise 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?

Match each situation to its impact (a-c) on the current year's net income. -Merchandise was purchased FOB destination on the last day of the year.The cost of the merchandise purchased was not included in ending inventory.

Kristin's Boutique has identified the following items for possible inclusion in its December 31 inventory.Which of the following would not be included in the year-end inventory?

The primary objectives of control over inventory are

If merchandise inventory is being valued at cost and the purchase price is steadily falling,which method of costing will yield the largest net income?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 7: Inventories

If Beginning Inventory (BI)+ Purchases (P)- Ending Inventory (EI)= Cost of Merchandise Sold (COMS),an equivalent equation can be written as​

​ Match each description to the appropriate cost flow assumption (a-c). -Cost of the latest purchases are assigned to ending inventory

"Market" as used in the phrase "lower of cost or market" for valuing inventory,refers to the price at which the inventory is being offered for sale by its owner.

One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

Cost flow is in the order in which costs were incurred when using

Match each description to the appropriate inventory system (a or b).​ -When using this system,a physical inventory is necessary to determine cost of merchandise sold.

​ Match each description to the appropriate cost flow assumption (a-c). -Prohibited under International Financial Reporting Standards (IFRS)

Match each description to the appropriate cost flow assumption (a-d). -Cost flow matches the unit sold to the unit purchased.

The units of an item available for sale during the year were as follows:​ There are 30 units of the item in the physical inventory at December 31.The periodic inventory system is used.Determine the ending inventory cost using FIFO.

During the taking of its physical inventory on December 31,Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000.The effect on the balance sheet and income statement would be

On the basis of the following data,determine the value of the inventory at the lower of cost or market.Apply lower of cost or market to each inventory item.Show your work.

A business using the retail method of inventory costing determines that merchandise 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?

Match each situation to its impact (a-c) on the current year's net income. -Merchandise was purchased FOB destination on the last day of the year.The cost of the merchandise purchased was not included in ending inventory.

Kristin's Boutique has identified the following items for possible inclusion in its December 31 inventory.Which of the following would not be included in the year-end inventory?

The primary objectives of control over inventory are

If merchandise inventory is being valued at cost and the purchase price is steadily falling,which method of costing will yield the largest net income?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

If Beginning Inventory (BI)+ Purchases (P)- Ending Inventory (EI)= Cost of Merchandise Sold (COMS),an equivalent equation can be written as

Match each description to the appropriate cost flow assumption (a-c). -Cost of the latest purchases are assigned to ending inventory

Match each description to the appropriate inventory system (a or b). -When using this system,a physical inventory is necessary to determine cost of merchandise sold.

Match each description to the appropriate cost flow assumption (a-c). -Prohibited under International Financial Reporting Standards (IFRS)

The units of an item available for sale during the year were as follows: There are 30 units of the item in the physical inventory at December 31.The periodic inventory system is used.Determine the ending inventory cost using FIFO.