Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Use the information below to answer the following questions.
Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.
​
   ​
-Assuming that the company uses the perpetual inventory system,determine the cost of merchandise sold for the sale of May 20 using the LIFO inventory cost method.

Accepted Answer

A) $136 
B) $144 
C) $180 
D) $120 
A) $136 
B) $144 
C) $180 
D) $120

Question 3

Use the information below to answer the following questions.
​
The following units of an inventory item were available for sale during the year:
The firm uses the periodic inventory system. During the year, 60 units of the item were sold.   ​
-The value of ending inventory rounded to the nearest dollar using average cost is

Accepted Answer

A) $1,353 
B) $1,263 
C) $1,375 
D) $1,150 
A) $1,353 
B) $1,263 
C) $1,375 
D) $1,150

Question 4

In the retail inventory method,the cost to retail ratio is equal to the cost of merchandise sold divided by the retail price of the merchandise sold.

Accepted Answer

A) True 
 B)False

Question 5

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 6

All of the following are documents used for inventory control except a

Accepted Answer

A) petty cash voucher 
B) vendor's invoice 
C) receiving report 
D) purchase order 
A) petty cash voucher 
B) vendor's invoice 
C) receiving report 
D) purchase order

Question 7

a. Explain the effect of the following on the financial statements:​Goods held on consignment were included in the ending inventory count.​Goods purchased FOB shipping point were in transit on the last day of the year.These goods were not counted as part of ending inventory.​Goods sold FOB shipping point were in transit on the last day of the year.These goods were not counted as part of ending inventory.​​
b. What happens if inventory errors are not found and corrected?

Accepted Answer

a.Goods held on consignment were include

Question 8

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 9

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 10

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by 2.

Accepted Answer

A) True 
 B)False

Question 11

A company will most likely use an estimated method of determining inventory when

Accepted Answer

A) the company decides not to do a physical inventory 
B) a natural disaster has destroyed most of the inventory 
C) the company has not kept up with its inventory records 
D) the company is preparing annual financial statements 
A) the company decides not to do a physical inventory 
B) a natural disaster has destroyed most of the inventory 
C) the company has not kept up with its inventory records 
D) the company is preparing annual financial statements

Question 12

If ending inventory for the year is overstated,owner's equity reported on the balance sheet at the end of the year is understated.

Accepted Answer

A) True 
 B)False

Question 13

Safeguarding inventory and proper reporting of the inventory in the financial statements are the reasons for controlling the inventory.

Accepted Answer

A) True 
 B)False

Question 14

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

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 15

Match each situation to its impact (a-c) on the current year's net income.
-Merchandise that was sold and shipped FOB destination on the last day of the year was not included in the seller's 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 16

Which of the following is not an example of safeguarding inventory?

Accepted Answer

A) storing inventory in restricted areas 
B) physical devices such as two-way mirrors, cameras, and alarms 
C) matching receiving documents, purchase orders, and vendor's invoice 
D) returning inventory that is defective or broken 
A) storing inventory in restricted areas 
B) physical devices such as two-way mirrors, cameras, and alarms 
C) matching receiving documents, purchase orders, and vendor's invoice 
D) returning inventory that is defective or broken

Question 17

Which of the following measures the relationship between cost of merchandise sold and the amount of inventory carried during the period?

Accepted Answer

A) inventory turnover 
B) fixed asset turnover 
C) retail method of inventory costing 
D) gross profit method of inventory costing 
A) inventory turnover 
B) fixed asset turnover 
C) retail method of inventory costing 
D) gross profit method of inventory costing

Question 18

On the basis of the following data,determine the estimated cost of the inventory as of March 31 by the retail method,presenting details of the computation in good order.

Accepted Answer

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

Question 19

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

Accepted Answer

The answer of Beginning inventory,purchases,and sales data for tennis rackets...

Question 20

If the cost of an item of inventory is $60 and the current replacement cost is $75,the amount included in inventory according to the lower of cost or market is

Accepted Answer

A) $15 
B) $60 
C) $75 
D) $135 
A) $15 
B) $60 
C) $75 
D) $135

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

In the retail inventory method,the cost to retail ratio is equal to the cost of merchandise sold divided by the retail price of the merchandise sold.

Taking a physical count of inventory

All of the following are documents used for inventory control except a

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

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

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by 2.

A company will most likely use an estimated method of determining inventory when

If ending inventory for the year is overstated,owner's equity reported on the balance sheet at the end of the year is understated.

Safeguarding inventory and proper reporting of the inventory in the financial statements are the reasons for controlling the inventory.

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

Match each situation to its impact (a-c) on the current year's net income. -Merchandise that was sold and shipped FOB destination on the last day of the year was not included in the seller's ending inventory.

Which of the following is not an example of safeguarding inventory?

Which of the following measures the relationship between cost of merchandise sold and the amount of inventory carried during the period?

On the basis of the following data,determine the estimated cost of the inventory as of March 31 by the retail method,presenting details of the computation in good order.

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

If the cost of an item of inventory is $60 and the current replacement cost is $75,the amount included in inventory according to the lower of cost or market is

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

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

In the retail inventory method,the cost to retail ratio is equal to the cost of merchandise sold divided by the retail price of the merchandise sold.

Taking a physical count of inventory

All of the following are documents used for inventory control except a

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

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

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by 2.

A company will most likely use an estimated method of determining inventory when

If ending inventory for the year is overstated,owner's equity reported on the balance sheet at the end of the year is understated.

Safeguarding inventory and proper reporting of the inventory in the financial statements are the reasons for controlling the inventory.

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

Match each situation to its impact (a-c) on the current year's net income. -Merchandise that was sold and shipped FOB destination on the last day of the year was not included in the seller's ending inventory.

Which of the following is not an example of safeguarding inventory?

Which of the following measures the relationship between cost of merchandise sold and the amount of inventory carried during the period?

On the basis of the following data,determine the estimated cost of the inventory as of March 31 by the retail method,presenting details of the computation in good order.

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

If the cost of an item of inventory is $60 and the current replacement cost is $75,the amount included in inventory according to the lower of cost or market is

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

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