Question 1

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,...

Question 2

Unsold consigned merchandise should be included in the consignee's inventory.

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

Stevens Company started the year with an inventory cost of $145,000. During the month of January they purchased inventory that cost of $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

Accepted Answer

A)  $58,000 
B)  $91,000 
C)  $107,000 
D)  $69,300 
A)  $58,000 
B)  $91,000 
C)  $107,000 
D)  $69,300

Question 5

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is

Accepted Answer

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

Question 6

The two most widely used methods for determining the cost of inventory are

Accepted Answer

A)  FIFO and LIFO 
B)  FIFO and average 
C)  LIFO and average 
D)  gross profit and average 
A)  FIFO and LIFO 
B)  FIFO and average 
C)  LIFO and average 
D)  gross profit and average

Question 7

If a fire destroys the merchandise inventory, the gross profit method can be used to estimate the cost of merchandise destroyed.

Accepted Answer

A) True 
 B)False

Question 8

If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.

Accepted Answer

A) True 
 B)False

Question 9

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item, by major classification of inventory, or by the total inventory.

Accepted Answer

A) True 
 B)False

Question 10

A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following measures the length of time it takes to acquire, sell and replace inventory?

Accepted Answer

A)  inventory turnover 
B)  number of days' sales in inventory 
C)  retail method of inventory costing 
D)  gross profit method of inventory costing 
A)  inventory turnover 
B)  number of days' sales in inventory 
C)  retail method of inventory costing 
D)  gross profit method of inventory costing

Question 12

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 goods sold the year according to the LIFO 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 13

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

Accepted Answer

A)  inventory turnover only 
B)  number of days' sales in inventory only 
C)  both inventory turnover and number of days' sales in inventory 
D)  neither inventory turnover or number of days' sales in inventory 
A)  inventory turnover only 
B)  number of days' sales in inventory only 
C)  both inventory turnover and number of days' sales in inventory 
D)  neither inventory turnover or number of days' sales in inventory

Question 14

For the year ended December 31, 2011 Depot Max's cost of merchandise sold was $54,350. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days sales in inventory is closest to

Accepted Answer

A)  43 
B)  50 
C)  8 
D)  47 
A)  43 
B)  50 
C)  8 
D)  47

Question 15

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 inventory at the end of the year according to the average cost method?

Accepted Answer

A)  $655 
B)  $620 
C)  $690 
D)  $659 
A)  $655 
B)  $620 
C)  $690 
D)  $659

Question 16

Beginning inventory, purchases and sales data for T-shirts are as follows:
   Assuming the business maintains a periodic inventory system, calculate the cost of merchandise sold and ending inventory under the following assumptions:
a. FIFO
b. LIFO
c. Average cost (round cost of merchandise sold and ending inventory to the nearest dollar)

Accepted Answer

a. Cost of Merchandise Sold = $642.00
En

Question 17

Under the periodic inventory system, the merchandise inventory account continuously discloses the amount of inventory on hand.

Accepted Answer

A) True 
 B)False

Question 18

During periods of rapidly rising costs, the use of the LIFO method results in illusory or inventory profits.

Accepted Answer

A) True 
 B)False

Question 19

Assume that three identical units of merchandise are purchased during October, as follows:
   Assume one unit is sold on October 31 for $15. Determine Cost of Merchandise Sold, Gross Profit, and Ending Inventory under the Average Cost method.

Accepted Answer

The answer of Assume that three identical units of merchandise...

Question 20

Merchandise inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

Accepted Answer

A)  net income is understated 
B)  net income is overstated 
C)  cost of merchandise sold is understated 
D)  merchandise inventory reported on the balance sheet is overstated 
A)  net income is understated 
B)  net income is overstated 
C)  cost of merchandise sold is understated 
D)  merchandise inventory reported on the balance sheet is overstated

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.

Unsold consigned merchandise should be included in the consignee's inventory.

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

Stevens Company started the year with an inventory cost of $145,000. During the month of January they purchased inventory that cost of $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is

The two most widely used methods for determining the cost of inventory are

If a fire destroys the merchandise inventory, the gross profit method can be used to estimate the cost of merchandise destroyed.

If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item, by major classification of inventory, or by the total inventory.

A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.

Which of the following measures the length of time it takes to acquire, sell and replace inventory?

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 goods sold the year according to the LIFO method?

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

For the year ended December 31, 2011 Depot Max's cost of merchandise sold was $54,350. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days sales in inventory is closest to

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 inventory at the end of the year according to the average cost method?

Under the periodic inventory system, the merchandise inventory account continuously discloses the amount of inventory on hand.

During periods of rapidly rising costs, the use of the LIFO method results in illusory or inventory profits.

Assume that three identical units of merchandise are purchased during October, as follows: Assume one unit is sold on October 31 for $15. Determine Cost of Merchandise Sold, Gross Profit, and Ending Inventory under the Average Cost method.

Merchandise inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

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

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.

Unsold consigned merchandise should be included in the consignee's inventory.

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

Stevens Company started the year with an inventory cost of $145,000. During the month of January they purchased inventory that cost of $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is

The two most widely used methods for determining the cost of inventory are

If a fire destroys the merchandise inventory, the gross profit method can be used to estimate the cost of merchandise destroyed.

If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item, by major classification of inventory, or by the total inventory.

A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.

Which of the following measures the length of time it takes to acquire, sell and replace inventory?

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 goods sold the year according to the LIFO method?

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

For the year ended December 31, 2011 Depot Max's cost of merchandise sold was $54,350. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days sales in inventory is closest to

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 inventory at the end of the year according to the average cost method?

Under the periodic inventory system, the merchandise inventory account continuously discloses the amount of inventory on hand.

During periods of rapidly rising costs, the use of the LIFO method results in illusory or inventory profits.

Assume that three identical units of merchandise are purchased during October, as follows: Assume one unit is sold on October 31 for $15. Determine Cost of Merchandise Sold, Gross Profit, and Ending Inventory under the Average Cost method.

Merchandise inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

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