Question 1

If a company mistakenly counts less items during a physical inventory than actually exist,how will the error affect the cost of merchandise sold?

Accepted Answer

A) understated 
B) overstated 
C) no change 
D) only inventory will be affected 
A) understated 
B) overstated 
C) no change 
D) only inventory will be affected

Question 2

During times of rising prices,which of the following is not an accurate statement?

Accepted Answer

A) Average costing will yield results that are between those of FIFO and LIFO. 
B) LIFO will result in a higher cost of merchandise sold than FIFO. 
C) FIFO will result in a higher net income than LIFO. 
D) LIFO will result in higher income taxes than FIFO. 
A) Average costing will yield results that are between those of FIFO and LIFO. 
B) LIFO will result in a higher cost of merchandise sold than FIFO. 
C) FIFO will result in a higher net income than LIFO. 
D) LIFO will result in higher income taxes than FIFO.

Question 3

Excess inventory results in all of the following except

Accepted Answer

A) ​tied-up funds that could be used to improve operations 
B) ​lost sales 
C) ​increased storage expense 
D) ​increased risk of loss due to damage 
A) ​tied-up funds that could be used to improve operations 
B) ​lost sales 
C) ​increased storage expense 
D) ​increased risk of loss due to damage

Question 4

Matching
Match each description to the appropriate document used for inventory control (a-c).
-Establishes an initial record of the receipt of inventory

Accepted Answer

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

Question 5

The following data were taken from Castle,Inc.Determine the inventory turnover ratio and the days' sales in inventory for Castle Inc.Round to two decimal places.

Accepted Answer

Inventory Turnover = Cost of Merchandise

Question 6

Under the _____ inventory method,accounting records maintain a continuously updated inventory value.

Accepted Answer

A) retail 
B) periodic 
C) physical 
D) perpetual 
A) retail 
B) periodic 
C) physical 
D) perpetual

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 25 units of the commodity on hand at the end of the year.
  
-What is the amount of inventory at the end of the year rounded to the nearest dollar using the average cost method?

Accepted Answer

A) $1,685 
B) $1,575 
C) $1,805 
D) $3,705 
A) $1,685 
B) $1,575 
C) $1,805 
D) $3,705

Question 8

List the internal control objectives illustrated by the following:

Accepted Answer

The answer of List the internal control objectives illustrated by...

Question 9

When merchandise sold is assumed to be in the order in which the purchases were made,the company is using

Accepted Answer

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

Question 10

Safeguarding inventory from damage or theft is a primary objective for the control of inventory.If you were running a clothing store,name three specific controls you would implement to guard inventory from theft.

Accepted Answer

The answer of Safeguarding inventory from damage or theft is...

Question 11

Direct disposal costs do not include special advertising or sales commissions.

Accepted Answer

A) True 
 B)False

Question 12

When merchandise inventory is shown on the balance sheet,both the method of determining the cost of the inventory and the method of valuing the inventory should be shown.

Accepted Answer

A) True 
 B)False

Question 13

If the revenues are correctly reported and the gross profit of a company is understated,what is the effect on owner's equity?

Accepted Answer

A) understated 
B) overstated 
C) correctly stated 
D) None of these choices 
A) understated 
B) overstated 
C) correctly stated 
D) None of these choices

Question 14

List three different security measures taken to safeguard inventory.

Accepted Answer

The answer of List three different security measures taken to...

Question 15

Match each situation to its impact (a-c) on the current year's net income.
-Merchandise held on consignment was included in the count of 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

All of the following are reasons to use an estimated method of costing inventory except​

Accepted Answer

A) perpetual inventory records are not maintained 
B) purchase records are not maintained 
C) a disaster has destroyed the inventory records and the inventory 
D) interim financial statements are required but physical inventory is only taken at the end of the financial accounting period 
A) perpetual inventory records are not maintained 
B) purchase records are not maintained 
C) a disaster has destroyed the inventory records and the inventory 
D) interim financial statements are required but physical inventory is only taken at the end of the financial accounting period

Question 17

​
Match each description to the appropriate cost flow assumption (a-c).
-Produces results that are similar to the specific identification method

Accepted Answer

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

Question 18

The units of an item available for sale during the year were as follows:​   There are 48 units of the item in the physical inventory at December 31.The periodic inventory system is used.Determine the inventory cost by 
(a)the first-in,first-out method,
(b)the last-in,first-out method,and 
(c)the average cost method.Show your work.

Accepted Answer

The answer of The units of an item available for...

Question 19

Match each description to the appropriate inventory system (a or b).​
-Average cost is rarely used with this system.

Accepted Answer

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

Question 20

Assume that three identical units of merchandise were purchased during October,as follows:​​   Assume one unit is sold on October 31 for $28.Determine cost of merchandise sold,gross profit,and ending inventory under the average cost method.

Accepted Answer

The answer of Assume that three identical units of merchandise...

If a company mistakenly counts less items during a physical inventory than actually exist,how will the error affect the cost of merchandise sold?

During times of rising prices,which of the following is not an accurate statement?

Excess inventory results in all of the following except

Matching Match each description to the appropriate document used for inventory control (a-c). -Establishes an initial record of the receipt of inventory

The following data were taken from Castle,Inc.Determine the inventory turnover ratio and the days' sales in inventory for Castle Inc.Round to two decimal places.

Under the _____ inventory method,accounting records maintain a continuously updated inventory value.

List the internal control objectives illustrated by the following:

When merchandise sold is assumed to be in the order in which the purchases were made,the company is using

Safeguarding inventory from damage or theft is a primary objective for the control of inventory.If you were running a clothing store,name three specific controls you would implement to guard inventory from theft.

Direct disposal costs do not include special advertising or sales commissions.

When merchandise inventory is shown on the balance sheet,both the method of determining the cost of the inventory and the method of valuing the inventory should be shown.

If the revenues are correctly reported and the gross profit of a company is understated,what is the effect on owner's equity?

List three different security measures taken to safeguard inventory.

Match each situation to its impact (a-c) on the current year's net income. -Merchandise held on consignment was included in the count of ending inventory.

All of the following are reasons to use an estimated method of costing inventory except

Match each description to the appropriate cost flow assumption (a-c). -Produces results that are similar to the specific identification method

Match each description to the appropriate inventory system (a or b). -Average cost is rarely used with this system.

Assume that three identical units of merchandise were purchased during October,as follows: Assume one unit is sold on October 31 for $28.Determine cost of merchandise sold,gross profit,and ending inventory under the average cost 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

If a company mistakenly counts less items during a physical inventory than actually exist,how will the error affect the cost of merchandise sold?

During times of rising prices,which of the following is not an accurate statement?

Excess inventory results in all of the following except

Matching Match each description to the appropriate document used for inventory control (a-c). -Establishes an initial record of the receipt of inventory

The following data were taken from Castle,Inc.Determine the inventory turnover ratio and the days' sales in inventory for Castle Inc.Round to two decimal places.

Under the _____ inventory method,accounting records maintain a continuously updated inventory value.

List the internal control objectives illustrated by the following:

When merchandise sold is assumed to be in the order in which the purchases were made,the company is using

Safeguarding inventory from damage or theft is a primary objective for the control of inventory.If you were running a clothing store,name three specific controls you would implement to guard inventory from theft.

Direct disposal costs do not include special advertising or sales commissions.

When merchandise inventory is shown on the balance sheet,both the method of determining the cost of the inventory and the method of valuing the inventory should be shown.

If the revenues are correctly reported and the gross profit of a company is understated,what is the effect on owner's equity?

List three different security measures taken to safeguard inventory.

Match each situation to its impact (a-c) on the current year's net income. -Merchandise held on consignment was included in the count of ending inventory.

All of the following are reasons to use an estimated method of costing inventory except​

​ Match each description to the appropriate cost flow assumption (a-c). -Produces results that are similar to the specific identification method

Match each description to the appropriate inventory system (a or b).​ -Average cost is rarely used with this system.

Assume that three identical units of merchandise were purchased during October,as follows:​​ Assume one unit is sold on October 31 for $28.Determine cost of merchandise sold,gross profit,and ending inventory under the average cost 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

All of the following are reasons to use an estimated method of costing inventory except

Match each description to the appropriate cost flow assumption (a-c). -Produces results that are similar to the specific identification method

Match each description to the appropriate inventory system (a or b). -Average cost is rarely used with this system.

Assume that three identical units of merchandise were purchased during October,as follows: Assume one unit is sold on October 31 for $28.Determine cost of merchandise sold,gross profit,and ending inventory under the average cost method.