Question 1

In the retail inventory method, the cost to retail ratio is equal to the cost of goods sold divided by the retail price of the good sold.

Accepted Answer

A) True 
 B)False

Question 2

Inventory costing methods place primary emphasis on assumptions about

Accepted Answer

A)  flow of goods 
B)  flow of costs 
C)  flow of goods or flow of costs depending on the method 
D)  neither flow or goods or flow of costs 
A)  flow of goods 
B)  flow of costs 
C)  flow of goods or flow of costs depending on the method 
D)  neither flow or goods or flow of costs

Question 3

A perpetual inventory system is an effective means of control over inventory.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

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 cost of good sold for the year according to the average cost method?

Accepted Answer

A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250 
A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250

Question 7

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Accepted Answer

A) True 
 B)False

Question 8

Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

Accepted Answer

A) True 
 B)False

Question 9

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

The specific identification inventory method should be used when the inventory consists of identical, low cost units that are purchased and sold frequently.

Accepted Answer

A) True 
 B)False

Question 12

Use the following information to answer the following questions. The 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 ending inventory value for the month of May using the FIFO inventory cost method.

Accepted Answer

A)  $494 
B)  $502 
C)  $422 
D)  $520 
A)  $494 
B)  $502 
C)  $422 
D)  $520

Question 13

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 14

Under the _________ inventory method, accounting records maintain a continuously updated inventory value.

Accepted Answer

A)  retail 
B)  periodic 
C)  physical 
D)  perpetual 
A)  retail 
B)  periodic 
C)  physical 
D)  perpetual

Question 15

The following units of a particular item were available for sale during the year:
   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

$193,200 (

Question 16

Beginning inventory, purchases and sales data for tennis rackets 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...

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

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 20

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

Accepted Answer

A) True 
 B)False

In the retail inventory method, the cost to retail ratio is equal to the cost of goods sold divided by the retail price of the good sold.

Inventory costing methods place primary emphasis on assumptions about

A perpetual inventory system is an effective means of control over inventory.

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

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

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 cost of good sold for the year according to the average cost method?

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

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

The specific identification inventory method should be used when the inventory consists of identical, low cost units that are purchased and sold frequently.

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

Under the _________ inventory method, accounting records maintain a continuously updated inventory value.

The following units of a particular item were available for sale during the year: 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?

Beginning inventory, purchases and sales data for tennis rackets 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.

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

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

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.

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

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

In the retail inventory method, the cost to retail ratio is equal to the cost of goods sold divided by the retail price of the good sold.

Inventory costing methods place primary emphasis on assumptions about

A perpetual inventory system is an effective means of control over inventory.

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

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

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 cost of good sold for the year according to the average cost method?

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

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

The specific identification inventory method should be used when the inventory consists of identical, low cost units that are purchased and sold frequently.

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

Under the _________ inventory method, accounting records maintain a continuously updated inventory value.

The following units of a particular item were available for sale during the year: 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?

Beginning inventory, purchases and sales data for tennis rackets 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.

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

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

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.

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

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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