Question 1

During a period of falling prices,which of the following inventory methods generally results in the lowest balance sheet amount for inventory.

Accepted Answer

A) average method 
B) LIFO method 
C) FIFO method 
D) can not tell without more information 
A) average method 
B) LIFO method 
C) FIFO method 
D) can not tell without more information C

Question 2

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 two.

Accepted Answer

A) True 
 B)False  True

Question 3

The beginning inventory and purchases of an item for the period were as follows:
   
The company uses the periodic system,and there were 15 units in the inventory at the end of the period.Determine the cost of the 15 units in the inventory by each of the following methods,presenting details of your computations: (a)first-in,first-out; (b)last-in,first-out; (c)average cost.Do not round your intermediate calculations.Round your final answer to two decimal places.

Accepted Answer

(a)
   (b)
   (c)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 the 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 6

A physical inventory should be taken at the end of every month.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

On the basis of the following data,what is the estimated cost of the merchandise inventory on May 31 using the retail method?

Accepted Answer

A) $250,000 
B) $360,000 
C) $172,500 
D) $187,500 
A) $250,000 
B) $360,000 
C) $172,500 
D) $187,500

Question 9

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 10

Three identical units of Item Steele Plate are purchased during March,as shown below.
   
Assume that one unit is sold on March 23 for $1,125.Determine the gross profit for March and ending inventory on March 31 using (a)FIFO, (b)LIFO,and (c)average cost methods.

Accepted Answer

The answer of Three identical units of Item Steele Plate...

Question 11

The following data were taken from the annual reports of Jong Inc. ,a manufacturer of fireworks,and Hobson Inc. ,a manufacturer of computers.
   
(a)Determine the (1)inventory turnover and (2)number of day's sales in inventory for Jong and Hobson.Round your answer 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 12

If merchandise inventory is being valued at cost and the price level is steadily rising,the method of costing that will yield the highest net income is

Accepted Answer

A) periodic 
B) LIFO 
C) FIFO 
D) average 
A) periodic 
B) LIFO 
C) FIFO 
D) average

Question 13

Too much inventory on hand

Accepted Answer

A) reduces solvency 
B) increases the cost to safeguard the assets 
C) increases the losses due to price declines 
D) all of the above 
A) reduces solvency 
B) increases the cost to safeguard the assets 
C) increases the losses due to price declines 
D) all of the above

Question 14

If a manufacturer ships merchandise to a retailer on consignment,the unsold merchandise should be included in the inventory of the

Accepted Answer

A) consignee 
B) retailer 
C) manufacturer 
D) shipper 
A) consignee 
B) retailer 
C) manufacturer 
D) shipper

Question 15

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

Accepted Answer

The answer of Fill in the missing amounts from the...

Question 16

The inventory method that assigns the most recent costs to cost of goods sold is

Accepted Answer

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

Question 17

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 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 20

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

Accepted Answer

A) True 
 B)False

During a period of falling prices,which of the following inventory methods generally results in the lowest balance sheet amount for inventory.

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 two.

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

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 the inventory at the end of the year using the LIFO method?

A physical inventory should be taken at the end of every month.

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

On the basis of the following data,what is the estimated cost of the merchandise inventory on May 31 using the retail method?

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

Three identical units of Item Steele Plate are purchased during March,as shown below. Assume that one unit is sold on March 23 for $1,125.Determine the gross profit for March and ending inventory on March 31 using (a)FIFO, (b)LIFO,and (c)average cost methods.

If merchandise inventory is being valued at cost and the price level is steadily rising,the method of costing that will yield the highest net income is

Too much inventory on hand

If a manufacturer ships merchandise to a retailer on consignment,the unsold merchandise should be included in the inventory of the

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

The inventory method that assigns the most recent costs to cost of goods sold is

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

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

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

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

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 6: Inventories

During a period of falling prices,which of the following inventory methods generally results in the lowest balance sheet amount for inventory.

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 two.

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

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 the inventory at the end of the year using the LIFO method?

A physical inventory should be taken at the end of every month.

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

On the basis of the following data,what is the estimated cost of the merchandise inventory on May 31 using the retail method?

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

Three identical units of Item Steele Plate are purchased during March,as shown below. Assume that one unit is sold on March 23 for $1,125.Determine the gross profit for March and ending inventory on March 31 using (a)FIFO, (b)LIFO,and (c)average cost methods.

If merchandise inventory is being valued at cost and the price level is steadily rising,the method of costing that will yield the highest net income is

Too much inventory on hand

If a manufacturer ships merchandise to a retailer on consignment,the unsold merchandise should be included in the inventory of the

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

The inventory method that assigns the most recent costs to cost of goods sold is

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

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

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

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

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