Question 1

When reported in financial statements,a LIFO allowance account usually:

Accepted Answer

A) Is shown in the firm's income statement. 
B) Is added to LIFO cost to indicate what the inventory would cost on a FIFO basis. 
C) Indicates the effect on income if LIFO were not used. 
D) Shows the current rate of inflation for that asset. 
A) Is shown in the firm's income statement. 
B) Is added to LIFO cost to indicate what the inventory would cost on a FIFO basis. 
C) Indicates the effect on income if LIFO were not used. 
D) Shows the current rate of inflation for that asset.

Question 2

Assuming CBC uses the gross method to record purchases,ending inventory would be:

Accepted Answer

A) $6,480. 
B) $15,400. 
C) $15,480. 
D) $21,000. 
A) $6,480. 
B) $15,400. 
C) $15,480. 
D) $21,000.

Question 3

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

Accepted Answer

A) FIFO. 
B) LIFO. 
C) Weighted average. 
D) None of these answer choices is correct. 
A) FIFO. 
B) LIFO. 
C) Weighted average. 
D) None of these answer choices is correct.

Question 4

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

Accepted Answer

The answer of Listed below are 5 terms followed by...

Question 5

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016.  Missing information has been left blank.
-Required:  Compute the missing amounts.

Accepted Answer

The answer of The following information is taken from the...

Question 6

Dollar-value LIFO:

Accepted Answer

A) Starts with ending inventory measured at current costs and re-creates LIFO layers for measuring inventory costs. 
B) Increases the recordkeeping costs of LIFO. 
C) Only is allowed for internal reporting purposes. 
D) None of the above is correct. 
A) Starts with ending inventory measured at current costs and re-creates LIFO layers for measuring inventory costs. 
B) Increases the recordkeeping costs of LIFO. 
C) Only is allowed for internal reporting purposes. 
D) None of the above is correct.

Question 7

In a periodic inventory system,the cost of inventories sold is:

Accepted Answer

A) Debited to accounts receivable. 
B) Credited to cost of goods sold. 
C) Debited to cost of goods sold. 
D) Not recorded at the time goods are sold. 
A) Debited to accounts receivable. 
B) Credited to cost of goods sold. 
C) Debited to cost of goods sold. 
D) Not recorded at the time goods are sold.

Question 8

A company that prepares its financial statements according to International Financial Reporting Standards can use all of the same inventory valuation methods as a company that prepares its statements under U.S.GAAP.

Accepted Answer

A) True 
 B)False

Question 9

In a perpetual average cost system:

Accepted Answer

A) A new weighted-average unit cost is calculated each time additional units are purchased. 
B) The cost allocated to ending inventory is generally the same as it would be in a periodic inventory system. 
C) The moving-average unit cost is determined following each sale. 
D) The average is determined by dividing the total number of units sold by the cost of units purchased during the period. 
A) A new weighted-average unit cost is calculated each time additional units are purchased. 
B) The cost allocated to ending inventory is generally the same as it would be in a periodic inventory system. 
C) The moving-average unit cost is determined following each sale. 
D) The average is determined by dividing the total number of units sold by the cost of units purchased during the period.

Question 10

Briefly explain how companies that use LIFO can both increase and decrease reported earnings by "managing" ending inventories.

Accepted Answer

A company that uses LIFO can manipulate

Question 11

ATC's gross profit ratio (rounded)in 2016 is:

Accepted Answer

A) 53.4%. 
B) 51.9%. 
C) 50.3%. 
D) None of the above is correct. 
A) 53.4%. 
B) 51.9%. 
C) 50.3%. 
D) None of the above is correct.

Question 12

The ending inventory assuming LIFO and a perpetual inventory system is:

Accepted Answer

A) $1,545. 
B) $1,470. 
C) $1,580. 
D) $1,510. 
A) $1,545. 
B) $1,470. 
C) $1,580. 
D) $1,510.

Question 13

Ending inventory using the average cost method (rounded)is:

Accepted Answer

A) $ 650. 
B) $1,000. 
C) $ 707. 
D) $ 600. 
A) $ 650. 
B) $1,000. 
C) $ 707. 
D) $ 600.

Question 14

If a company uses LIFO,a LIFO liquidation causes a company's income taxes to increase:

Accepted Answer

A) When inventory purchase costs are rising. 
B) When inventory purchase costs are declining. 
C) Whether inventory purchase costs are declining or rising. 
D) LIFO liquidations have no effect on a company's income taxes. 
A) When inventory purchase costs are rising. 
B) When inventory purchase costs are declining. 
C) Whether inventory purchase costs are declining or rising. 
D) LIFO liquidations have no effect on a company's income taxes.

Question 15

What is Nueva's net income if it elects FIFO?

Accepted Answer

A) $440. 
B) $264. 
C) $620. 
D) $372. 
A) $440. 
B) $264. 
C) $620. 
D) $372.

Question 16

The disclosure note indicates an inventory liquidation during 2014,2013,and 2012.By how much did net income in 2014 increase due to the liquidation? Assume an income tax of 40%.

Accepted Answer

The effect (pre-tax)* (1 -.40

Question 17

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016.  Missing information has been left blank.
-Required:  Compute the missing amounts.

Accepted Answer

The answer of The following information is taken from the...

Question 18

In periods when costs are rising,LIFO liquidations:

Accepted Answer

A) Can't occur. 
B) Are used to reduce tax liabilities. 
C) Are a source of off-balance-sheet financing. 
D) Distort the net income. 
A) Can't occur. 
B) Are used to reduce tax liabilities. 
C) Are a source of off-balance-sheet financing. 
D) Distort the net income.

Question 19

Suppose that Badger's 2018 ending inventory,valued at year-end costs,was $153,600 and that the relative cost index for this inventory in 2018 was 1.20.What inventory balance would Badger report on its 12/31/18 balance sheet?

Accepted Answer

A) $128,000. 
B) $129,800. 
C) $153,600. 
D) None of these answer choices is correct. 
A) $128,000. 
B) $129,800. 
C) $153,600. 
D) None of these answer choices is correct.

Question 20

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

Accepted Answer

The answer of Listed below are 5 terms followed by...

Exam 8: Inventories: Measurement

When reported in financial statements,a LIFO allowance account usually:

Assuming CBC uses the gross method to record purchases,ending inventory would be:

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016. Missing information has been left blank. -Required: Compute the missing amounts.

Dollar-value LIFO:

In a periodic inventory system,the cost of inventories sold is:

A company that prepares its financial statements according to International Financial Reporting Standards can use all of the same inventory valuation methods as a company that prepares its statements under U.S.GAAP.

In a perpetual average cost system:

Briefly explain how companies that use LIFO can both increase and decrease reported earnings by "managing" ending inventories.

ATC's gross profit ratio (rounded)in 2016 is:

The ending inventory assuming LIFO and a perpetual inventory system is:

Ending inventory using the average cost method (rounded)is:

If a company uses LIFO,a LIFO liquidation causes a company's income taxes to increase:

What is Nueva's net income if it elects FIFO?

The disclosure note indicates an inventory liquidation during 2014,2013,and 2012.By how much did net income in 2014 increase due to the liquidation? Assume an income tax of 40%.

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016. Missing information has been left blank. -Required: Compute the missing amounts.

In periods when costs are rising,LIFO liquidations:

Suppose that Badger's 2018 ending inventory,valued at year-end costs,was $153,600 and that the relative cost index for this inventory in 2018 was 1.20.What inventory balance would Badger report on its 12/31/18 balance sheet?

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

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