Question 1

The inventory costing method that reports the earliest costs in ending inventory is

Accepted Answer

A)  FIFO 
B)  LIFO 
C)  Average cost 
D)  Specific identification 
A)  FIFO 
B)  LIFO 
C)  Average cost 
D)  Specific identification

Question 2

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 3

Cost flow is in the reverse order in which costs were incurred when using

Accepted Answer

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

Question 4

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 average cost method?

Accepted Answer

A)  $1,645 
B)  $1,525 
C)  $1,730 
D)  $3,620 
A)  $1,645 
B)  $1,525 
C)  $1,730 
D)  $3,620

Question 5

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

Question 6

List the internal control objectives illustrated by the following:

Accepted Answer

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

Question 7

During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Accepted Answer

A) True 
 B)False

Question 8

Under the LIFO inventory costing method, the most recent costs are assigned to ending inventory.

Accepted Answer

A) True 
 B)False

Question 9

While taking a physical inventory, a company counts their inventory as less than the actual amount on hand. How will this error affect the income statement?

Accepted Answer

Net income

Question 10

If the cost of an item of inventory is $50 and the current replacement cost is $57, the amount included in inventory according to the lower of cost or market is

Accepted Answer

A)  $7 
B)  $50 
C)  $57 
D)  $107 
A)  $7 
B)  $50 
C)  $57 
D)  $107

Question 11

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

Accepted Answer

Answers sh

Question 12

Most large companies will use only one inventory costing methods for all of its different segments.

Accepted Answer

A) True 
 B)False

Question 13

Taking a physical count of inventory

Accepted Answer

A)  is not necessary when a periodic inventory system is used 
B)  should be dine near year-end 
C)  has no internal control relevance 
D)  is not necessary when a perpetual inventory system is used 
A)  is not necessary when a periodic inventory system is used 
B)  should be dine near year-end 
C)  has no internal control relevance 
D)  is not necessary when a perpetual inventory system is used

Question 14

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 15

One effect of carrying too much inventory is risk that customers will change their buying habits.

Accepted Answer

A) True 
 B)False

Question 16

A business using the retail method of inventory costing determines that merchandise inventory at retail is $1,700,000. 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

$1,700,000

Question 17

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 18

Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

Accepted Answer

A)  customer's ledger 
B)  creditor's ledger 
C)  inventory ledger 
D)  merchandise inventory account 
A)  customer's ledger 
B)  creditor's ledger 
C)  inventory ledger 
D)  merchandise inventory account

Question 19

During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

Accepted Answer

A) True 
 B)False

Question 20

Beginning inventory, purchases and sales data for widgets are as follows:
   Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using LIFO.

Accepted Answer

The answer of Beginning inventory, purchases and sales data for...

The inventory costing method that reports the earliest costs in ending inventory is

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

Cost flow is in the reverse order in which costs were incurred when using

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 average cost method?

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.

List the internal control objectives illustrated by the following:

During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Under the LIFO inventory costing method, the most recent costs are assigned to ending inventory.

While taking a physical inventory, a company counts their inventory as less than the actual amount on hand. How will this error affect the income statement?

If the cost of an item of inventory is $50 and the current replacement cost is $57, the amount included in inventory according to the lower of cost or market is

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

Most large companies will use only one inventory costing methods for all of its different segments.

Taking a physical count of inventory

One effect of carrying too much inventory is risk that customers will change their buying habits.

A business using the retail method of inventory costing determines that merchandise inventory at retail is $1,700,000. If the ratio of cost to retail price is 55%, what is the amount of inventory to be reported on the financial statements?

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?

Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

Beginning inventory, purchases and sales data for widgets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using LIFO.

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

The inventory costing method that reports the earliest costs in ending inventory is

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

Cost flow is in the reverse order in which costs were incurred when using

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 average cost method?

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.

List the internal control objectives illustrated by the following:

During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Under the LIFO inventory costing method, the most recent costs are assigned to ending inventory.

While taking a physical inventory, a company counts their inventory as less than the actual amount on hand. How will this error affect the income statement?

If the cost of an item of inventory is $50 and the current replacement cost is $57, the amount included in inventory according to the lower of cost or market is

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

Most large companies will use only one inventory costing methods for all of its different segments.

Taking a physical count of inventory

One effect of carrying too much inventory is risk that customers will change their buying habits.

A business using the retail method of inventory costing determines that merchandise inventory at retail is $1,700,000. If the ratio of cost to retail price is 55%, what is the amount of inventory to be reported on the financial statements?

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?

Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

Beginning inventory, purchases and sales data for widgets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using LIFO.

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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