Question 1

List three different security measures taken by stores to safeguard inventory.

Accepted Answer

Answers may vary.
- Inventory should be

Question 2

The three identical units of Product Basic H are purchased during July,as shown below.
   
Assume one unit sells on July 28 for $45.
Determine the gross profit,cost of merchandise sold,and ending inventory on July 31 using (a)first in first out, (b)last in last out, (c)average cost flow methods.

Accepted Answer

The answer of The three identical units of Product Basic...

Question 3

The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined.

Accepted Answer

A) True 
 B)False

Question 4

Beginning inventory,purchases,and sales for Product - Weld TM are as follows:
   
Assuming a perpetual inventory system and the last-in,first-out method,determine (a)the cost of the merchandise sold for the September 30 sale and (b)the inventory on September 30.

Accepted Answer

a)Cost of merchandise sold:
8

Question 5

On the basis of the following data,determine the value of the inventory at the lower of cost or market.Apply lower of cost or market to each inventory item.Show your work.

Accepted Answer

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

Question 6

Which of the following is not an example for 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 7

The selection of an inventory costing method has no significant impact on the financial statements.

Accepted Answer

A) True 
 B)False

Question 8

If merchandise inventory is being valued at cost and the purchase price is steadily falling,which method of costing will yield the largest net income?

Accepted Answer

A) average cost 
B) LIFO 
C) FIFO 
D) weighted average 
A) average cost 
B) LIFO 
C) FIFO 
D) weighted average

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 11

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 12

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 goods 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 goods 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 13

The inventory data for an item for November are:
 
Using a perpetual system,what is the cost of the 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 14

If ending inventory for the year is understated,net income for the year is overstated.

Accepted Answer

A) True 
 B)False

Question 15

A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are not in the possession of the consignor.

Accepted Answer

A) True 
 B)False

Question 16

The units of Product Green-2 available for sale during the year were as follows:
   
There are 17 units of the product in the physical inventory at Sep 30.The periodic inventory system is used.Determine the cost of merchandise sold by (a)FIFO, (b)LIFO,and (c)average cost methods.

Accepted Answer

The answer of The units of Product Green-2 available for...

Question 17

During periods of decreasing costs the use of the LIFO method of costing inventory will result in a lower amount of net income than would result from the use of the FIFO method.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

If Beginning Inventory (BI)+ Purchases (P)- Ending Inventory (EI)= Cost of Goods Sold (COGS),an equivalent equation can be written as?

Accepted Answer

A) BI + P = COGS - EI 
B) BI - P = COGS + EI 
C) BI + P = COGS + EI 
D) EI + P = COGS - BI 
A) BI + P = COGS - EI 
B) BI - P = COGS + EI 
C) BI + P = COGS + EI 
D) EI + P = COGS - BI

Question 20

A business using the retail method of inventory costing determines that merchandise inventory at retail is $2,300,000.If the ratio of cost to retail price is 55%,what is the amount of inventory to be reported on the financial statements?

Accepted Answer

$2,300,000

List three different security measures taken by stores to safeguard inventory.

The three identical units of Product Basic H are purchased during July,as shown below. Assume one unit sells on July 28 for $45. Determine the gross profit,cost of merchandise sold,and ending inventory on July 31 using (a)first in first out, (b)last in last out, (c)average cost flow methods.

The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined.

Beginning inventory,purchases,and sales for Product - Weld TM are as follows: Assuming a perpetual inventory system and the last-in,first-out method,determine (a)the cost of the merchandise sold for the September 30 sale and (b)the inventory on September 30.

On the basis of the following data,determine the value of the inventory at the lower of cost or market.Apply lower of cost or market to each inventory item.Show your work.

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

The selection of an inventory costing method has no significant impact on the financial statements.

If merchandise inventory is being valued at cost and the purchase price is steadily falling,which method of costing will yield the largest net income?

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

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

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

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

If ending inventory for the year is understated,net income for the year is overstated.

A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are not in the possession of the consignor.

The units of Product Green-2 available for sale during the year were as follows: There are 17 units of the product in the physical inventory at Sep 30.The periodic inventory system is used.Determine the cost of merchandise sold by (a)FIFO, (b)LIFO,and (c)average cost methods.

During periods of decreasing costs the use of the LIFO method of costing inventory will result in a lower amount of net income than would result from the use of the FIFO method.

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

If Beginning Inventory (BI)+ Purchases (P)- Ending Inventory (EI)= Cost of Goods Sold (COGS),an equivalent equation can be written as?

A business using the retail method of inventory costing determines that merchandise inventory at retail is $2,300,000.If the ratio of cost to retail price is 55%,what is the amount of inventory to be reported on the financial statements?

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

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Exam 6: Inventories

List three different security measures taken by stores to safeguard inventory.

The three identical units of Product Basic H are purchased during July,as shown below. Assume one unit sells on July 28 for $45. Determine the gross profit,cost of merchandise sold,and ending inventory on July 31 using (a)first in first out, (b)last in last out, (c)average cost flow methods.

The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined.

Beginning inventory,purchases,and sales for Product - Weld TM are as follows: Assuming a perpetual inventory system and the last-in,first-out method,determine (a)the cost of the merchandise sold for the September 30 sale and (b)the inventory on September 30.

On the basis of the following data,determine the value of the inventory at the lower of cost or market.Apply lower of cost or market to each inventory item.Show your work.

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

The selection of an inventory costing method has no significant impact on the financial statements.

If merchandise inventory is being valued at cost and the purchase price is steadily falling,which method of costing will yield the largest net income?

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

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

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

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

If ending inventory for the year is understated,net income for the year is overstated.

A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are not in the possession of the consignor.

The units of Product Green-2 available for sale during the year were as follows: There are 17 units of the product in the physical inventory at Sep 30.The periodic inventory system is used.Determine the cost of merchandise sold by (a)FIFO, (b)LIFO,and (c)average cost methods.

During periods of decreasing costs the use of the LIFO method of costing inventory will result in a lower amount of net income than would result from the use of the FIFO method.

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

If Beginning Inventory (BI)+ Purchases (P)- Ending Inventory (EI)= Cost of Goods Sold (COGS),an equivalent equation can be written as?

A business using the retail method of inventory costing determines that merchandise inventory at retail is $2,300,000.If the ratio of cost to retail price is 55%,what is the amount of inventory to be reported on the financial statements?

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

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