Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Complete the chart,indicating whether LIFO or FIFO would give the highest and lowest amounts for each item,assuming a period of increasing costs.

Accepted Answer

The answer of Complete the chart,indicating whether LIFO or FIFO...

Question 4

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 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 5

Unsold consigned merchandise should be included in the consignee's inventory.

Accepted Answer

A) True 
 B)False

Question 6

​
Match each description to the appropriate cost flow assumption (a-c).
-Produces the highest gross profit when costs are decreasing

Accepted Answer

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

Question 7

The weighted average inventory cost flow method is the least used of the inventory costing methods.

Accepted Answer

A) True 
 B)False

Question 8

When using the FIFO inventory costing method,the most recent costs are assigned to the cost of merchandise sold.

Accepted Answer

A) True 
 B)False

Question 9

Based on the following information compute 
(a)inventory turnover,
(b)average daily cost of merchandise sold,and 
(c)days' sales in inventory for the current year.Use a 365-day year.
(d)If an inventory turnover of 12 is average for the industry,how is this company doing?

Accepted Answer

The answer of Based on the following information compute 
(a)inventory...

Question 10

If a company mistakenly counts more items during a physical inventory than actually exist,how will the error affect its bottom line?

Accepted Answer

A) There will be no change to net income. 
B) Net income will be overstated. 
C) Net income will be understated. 
D) Only gross profit will be affected. 
A) There will be no change to net income. 
B) Net income will be overstated. 
C) Net income will be understated. 
D) Only gross profit will be affected.

Question 11

Under the LIFO inventory costing method,the most recent costs are assigned to ending inventory.

Accepted Answer

A) True 
 B)False

Question 12

Of the three widely used inventory costing methods 
(FIFO,LIFO,and average cost),the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Inventory controls start when the merchandise is shelved in the store area.

Accepted Answer

A) True 
 B)False

Question 15

If the estimated rate of gross profit is 30%,what is the estimated cost of the merchandise 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 16

Match each situation to its impact (a-c) on the current year's net income.
-Purchased merchandise was shipped FOB shipping point on the last day of the year.The cost of the merchandise 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 17

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

Accepted Answer

A) True 
 B)False

Question 18

Matching
Match each description to the appropriate document used for inventory control (a-c).
-Last document in the chain,use to compare all three for accuracy

Accepted Answer

A) Receiving report 
B) Vendor's invoice 
C) Purchase order 
A) Receiving report 
B) Vendor's invoice 
C) Purchase order

Question 19

​
Match each description to the appropriate cost flow assumption (a-c).
-Does not follow the physical flow of goods in most cases

Accepted Answer

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

Question 20

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

Accepted Answer

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

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

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

Complete the chart,indicating whether LIFO or FIFO would give the highest and lowest amounts for each item,assuming a period of increasing costs.

Unsold consigned merchandise should be included in the consignee's inventory.

Match each description to the appropriate cost flow assumption (a-c). -Produces the highest gross profit when costs are decreasing

The weighted average inventory cost flow method is the least used of the inventory costing methods.

When using the FIFO inventory costing method,the most recent costs are assigned to the cost of merchandise sold.

Based on the following information compute (a)inventory turnover, (b)average daily cost of merchandise sold,and (c)days' sales in inventory for the current year.Use a 365-day year. (d)If an inventory turnover of 12 is average for the industry,how is this company doing?

If a company mistakenly counts more items during a physical inventory than actually exist,how will the error affect its bottom line?

Under the LIFO inventory costing method,the most recent costs are assigned to ending inventory.

Of the three widely used inventory costing methods (FIFO,LIFO,and average cost),the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

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

Inventory controls start when the merchandise is shelved in the store area.

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

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

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

Matching Match each description to the appropriate document used for inventory control (a-c). -Last document in the chain,use to compare all three for accuracy

Match each description to the appropriate cost flow assumption (a-c). -Does not follow the physical flow of goods in most cases

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

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

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

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

Complete the chart,indicating whether LIFO or FIFO would give the highest and lowest amounts for each item,assuming a period of increasing costs.

Unsold consigned merchandise should be included in the consignee's inventory.

​ Match each description to the appropriate cost flow assumption (a-c). -Produces the highest gross profit when costs are decreasing

The weighted average inventory cost flow method is the least used of the inventory costing methods.

When using the FIFO inventory costing method,the most recent costs are assigned to the cost of merchandise sold.

Based on the following information compute (a)inventory turnover, (b)average daily cost of merchandise sold,and (c)days' sales in inventory for the current year.Use a 365-day year. (d)If an inventory turnover of 12 is average for the industry,how is this company doing?

If a company mistakenly counts more items during a physical inventory than actually exist,how will the error affect its bottom line?

Under the LIFO inventory costing method,the most recent costs are assigned to ending inventory.

Of the three widely used inventory costing methods (FIFO,LIFO,and average cost),the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

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

Inventory controls start when the merchandise is shelved in the store area.

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

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

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

Matching Match each description to the appropriate document used for inventory control (a-c). -Last document in the chain,use to compare all three for accuracy

​ Match each description to the appropriate cost flow assumption (a-c). -Does not follow the physical flow of goods in most cases

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

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

Match each description to the appropriate cost flow assumption (a-c). -Produces the highest gross profit when costs are decreasing

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

Match each description to the appropriate cost flow assumption (a-c). -Does not follow the physical flow of goods in most cases