Question 1

FIFO is the inventory costing method that follows the physical flow of the goods.

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 gross profit for the sale of May 23 using the FIFO inventory cost method.

Accepted Answer

A) $108 
B) $120 
C) $72 
D) $180 
A) $108 
B) $120 
C) $72 
D) $180

Question 3

The following data were taken from the annual reports of Big Bang Inc.,a manufacturer of fireworks,and Orange Inc.,a manufacturer of computers.​   (a)Determine the 
(1)inventory turnover and 
(2)days' sales in inventory for Big Bang and Orange.Round your answers to two decimal places.
(b)How would you expect these measures to compare between the companies? Why?

Accepted Answer

The answer of The following data were taken from the...

Question 4

Inventory errors,if not discovered,will self-correct within two years.

Accepted Answer

A) True 
 B)False

Question 5

Beginning inventory,purchases,and sales for an inventory item are as follows:​​   The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year.What is the total cost of ending inventory according to FIFO?

Accepted Answer

$805 × 240

Question 6

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique,high-cost items?

Accepted Answer

A) FIFO 
B) LIFO 
C) average 
D) specific identification 
A) FIFO 
B) LIFO 
C) average 
D) specific identification

Question 7

Complete the following table using the perpetual FIFO method of inventory flow.

Accepted Answer

The answer of Complete the following table using the perpetual...

Question 8

Garrison Company uses the retail method of inventory costing.It started the year with an inventory that had a retail cost of $45,000.During the year,Garrison purchased an inventory with a retail sales value of $300,000.After performing a physical inventory,Garrison calculated the inventory at retail to be $80,000.The markup is 100% of cost.Determine the ending inventory at its estimated cost.​

Accepted Answer

A) $160,000 
B) $80,000 
C) $40,000 
D) $45,000 
A) $160,000 
B) $80,000 
C) $40,000 
D) $45,000

Question 9

For the year ended December 31,Depot Max's cost of merchandise sold was $56,900.Inventory at the beginning of the year was $6,540.Ending inventory was $7,250.Depot Max's days' sales in inventory is closest to

Accepted Answer

A) 42 
B) 46 
C) 8 
D) 44 
A) 42 
B) 46 
C) 8 
D) 44

Question 10

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 using the LIFO method?​

Accepted Answer

A) $1,685 
B) $1,575 
C) $1,805 
D) $3,815 
A) $1,685 
B) $1,575 
C) $1,805 
D) $3,815

Question 11

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 inventory at the end of the year rounded to the nearest dollar according to the average cost method?

Accepted Answer

A) $655 
B) $620 
C) $690 
D) $659 
A) $655 
B) $620 
C) $690 
D) $659

Question 12

During August,the first month of the fiscal year,sales totaled $875,000 and the cost of merchandise available for sale totaled $850,000.Estimate the cost of the merchandise inventory as of August 31,based on an estimated gross profit rate of 45%.

Accepted Answer

The answer of During August,the first month of the fiscal...

Question 13

Match each description to the appropriate cost flow assumption (a-d).
-The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

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 14

​
Match each description to the appropriate cost flow assumption (a-c).
-Assigns the same value to all inventory units

Accepted Answer

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

Question 15

Match each description to the appropriate cost flow assumption (a-d).
-Cost flow is in the order in which the costs were incurred.

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 16

​
Match each description to the appropriate cost flow assumption (a-c).
-Never results in either the highest or lowest possible net income

Accepted Answer

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

Question 17

The inventory data for an item for November are:Using a perpetual system,what is the cost of merchandise sold for November if the company uses FIFO?

Accepted Answer

A) $610 
B) $600 
C) $590 
D) $580 
A) $610 
B) $600 
C) $590 
D) $580

Question 18

Which of the following will be the same amount regardless of the cost flow assumption adopted?

Accepted Answer

A) ​number of items ordered 
B) ​gross profit 
C) ​cost of goods sold 
D) ​ending merchandise inventory 
A) ​number of items ordered 
B) ​gross profit 
C) ​cost of goods sold 
D) ​ending merchandise inventory

Question 19

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 inventory at the end of the year according to the FIFO method?

Accepted Answer

A) $655 
B) $620 
C) $690 
D) $659 
A) $655 
B) $620 
C) $690 
D) $659

Question 20

The units of an item available for sale during the year were as follows:​   There are 50 units of the item in the physical inventory at December 31.The periodic inventory system is used.Determine the ending 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...

FIFO is the inventory costing method that follows the physical flow of the goods.

Inventory errors,if not discovered,will self-correct within two years.

Beginning inventory,purchases,and sales for an inventory item are as follows: The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year.What is the total cost of ending inventory according to FIFO?

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique,high-cost items?

Complete the following table using the perpetual FIFO method of inventory flow.

For the year ended December 31,Depot Max's cost of merchandise sold was $56,900.Inventory at the beginning of the year was $6,540.Ending inventory was $7,250.Depot Max's days' sales in inventory is closest to

During August,the first month of the fiscal year,sales totaled $875,000 and the cost of merchandise available for sale totaled $850,000.Estimate the cost of the merchandise inventory as of August 31,based on an estimated gross profit rate of 45%.

Match each description to the appropriate cost flow assumption (a-d). -The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

Match each description to the appropriate cost flow assumption (a-c). -Assigns the same value to all inventory units

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is in the order in which the costs were incurred.

Match each description to the appropriate cost flow assumption (a-c). -Never results in either the highest or lowest possible net income

The inventory data for an item for November are:Using a perpetual system,what is the cost of merchandise sold for November if the company uses FIFO?

Which of the following will be the same amount regardless of the cost flow assumption adopted?

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

FIFO is the inventory costing method that follows the physical flow of the goods.

Inventory errors,if not discovered,will self-correct within two years.

Beginning inventory,purchases,and sales for an inventory item are as follows:​​ The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year.What is the total cost of ending inventory according to FIFO?

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique,high-cost items?

Complete the following table using the perpetual FIFO method of inventory flow.

For the year ended December 31,Depot Max's cost of merchandise sold was $56,900.Inventory at the beginning of the year was $6,540.Ending inventory was $7,250.Depot Max's days' sales in inventory is closest to

During August,the first month of the fiscal year,sales totaled $875,000 and the cost of merchandise available for sale totaled $850,000.Estimate the cost of the merchandise inventory as of August 31,based on an estimated gross profit rate of 45%.

Match each description to the appropriate cost flow assumption (a-d). -The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

​ Match each description to the appropriate cost flow assumption (a-c). -Assigns the same value to all inventory units

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is in the order in which the costs were incurred.

​ Match each description to the appropriate cost flow assumption (a-c). -Never results in either the highest or lowest possible net income

The inventory data for an item for November are:Using a perpetual system,what is the cost of merchandise sold for November if the company uses FIFO?

Which of the following will be the same amount regardless of the cost flow assumption adopted?

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 for an inventory item are as follows: The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year.What is the total cost of ending inventory according to FIFO?

Match each description to the appropriate cost flow assumption (a-c). -Assigns the same value to all inventory units

Match each description to the appropriate cost flow assumption (a-c). -Never results in either the highest or lowest possible net income