Question 1

In the first-in, first-out (FIFO) method of inventory valuation, the ending inventory is valued at the most recent cost, referred to as:

Accepted Answer

A)  average cost. 
B)  opportunity cost. 
C)  replacement cost. 
D)  sunk cost. 
A)  average cost. 
B)  opportunity cost. 
C)  replacement cost. 
D)  sunk cost. C

Question 2

Information relating to the beginning inventory and purchase of inventory by Marigold Corp. is as follows:
Calculate the cost of 100 units in the ending inventory by the last-in, first-out (LIFO) method of inventory valuation.
 $$\begin{array} { l l l } 
\text { Specific Purchase } & \text { Number of Units } & \text { Cost per Unit } \
\text { Beginning inventory } & 20 & \$ 50 \
\text { First purchase } & 60 & \$ 60 \
\text { Second purchase } & 55 & \$ 80
\end{array}$$

Accepted Answer

Cost of ending inventory of 100 units = (20 units of beginning inventory × Cost per unit of beginning inventory) + (60 units of first purchase × Cost per unit of first purchase) + (20 units of second purchase × Cost per unit of second purchase) = (20 units × $50) + (60 units × $60) + (20 units × $80) = $1,000 + $3,600 + $1,600 = $6,200​

Question 3

In the _____ method of inventory valuation, the costs of the units left over in ending inventory will be from the items purchased earliest.

Accepted Answer

A)  first-in, first-out (FIFO) 
B)  first-in, last-out (FILO) 
C)  last-in, first-out (LIFO) 
D)  last-in, last-out (LILO) 
A)  first-in, first-out (FIFO) 
B)  first-in, last-out (FILO) 
C)  last-in, first-out (LIFO) 
D)  last-in, last-out (LILO) C

Question 4

The _____ method of inventory valuation provides the most realistic amount for the Cost of Goods Sold section of the income statement.​

Accepted Answer

A)  break-even cost 
B)  total cost 
C)  ​first-in, first-out (FIFO) 
D)  ​last-in, first-out (LIFO) 
A)  break-even cost 
B)  total cost 
C)  ​first-in, first-out (FIFO) 
D)  ​last-in, first-out (LIFO)

Question 5

The _____ method of inventory valuation is based on the assumption that the units purchased first will be sold first.

Accepted Answer

A)  first-in, first-out (FIFO) 
B)  first-in, last-out (FILO) 
C)  last-in, first-out (LIFO) 
D)  last-in, last-out (LILO) 
A)  first-in, first-out (FIFO) 
B)  first-in, last-out (FILO) 
C)  last-in, first-out (LIFO) 
D)  last-in, last-out (LILO)

Question 6

Mercury Corp. has 700 units in ending inventory worth $21,000. The average cost per unit is:

Accepted Answer

A)  $50. 
B)  $30. 
C)  $16. 
D)  $47. 
A)  $50. 
B)  $30. 
C)  $16. 
D)  $47.

Question 7

Information relating to the beginning inventory and purchase of inventory by Magnesium Chemicals is as follows: The cost of 50 units in the ending inventory using the first-in, first-out method is:
$$\begin{array} { l l l } 
\text { Specific Purchase } & \text { Number of Units } & \text { Cost per Unit } \
\text { Beginning inventory } & 25 & \$ 100 \
\text { First purchase } & 30 & \$ 95 \
\text { Second purchase } & 40 & \$ 105
\end{array}$$

Accepted Answer

A)  $2,345. 
B)  $5,567. 
C)  $3,000. 
D)  $5,150. 
A)  $2,345. 
B)  $5,567. 
C)  $3,000. 
D)  $5,150.

Question 8

Which of the following mathematical expressions calculates the average cost per unit?

Accepted Answer

A)  Average Cost per Unit = ​Total Cost / Total Units Available 
B)  Average Cost per Unit = ​Variable Cost / Total Units Sold 
C)  Average Cost per Unit = ​Fixed Cost / Total Units Purchased 
D)  Average Cost per Unit = ​Mixed Cost / Total Units Used 
A)  Average Cost per Unit = ​Total Cost / Total Units Available 
B)  Average Cost per Unit = ​Variable Cost / Total Units Sold 
C)  Average Cost per Unit = ​Fixed Cost / Total Units Purchased 
D)  Average Cost per Unit = ​Mixed Cost / Total Units Used

Question 9

​The _____ method of inventory valuation provides the most realistic amount of ending merchandise inventory in the Current Assets section of the balance sheet.

Accepted Answer

A)  last-in, first-out (LIFO) 
B)  ​first-in, first-out (FIFO) 
C)  ​weighted-average-cost 
D)  marginal-average-cost 
A)  last-in, first-out (LIFO) 
B)  ​first-in, first-out (FIFO) 
C)  ​weighted-average-cost 
D)  marginal-average-cost

Question 10

The weighted-average-cost method uses standard cost per unit to determine ending inventory value.

Accepted Answer

A) True 
 B)False

Question 11

The first-in, first-out (FIFO) method is based on the assumption that the units of inventories purchased first will be sold first.

Accepted Answer

A) True 
 B)False

Question 12

If average cost per unit is $120, then cost of ending inventory of 150 units using the weighted average cost method of inventory valuation is:

Accepted Answer

A)  $10,000. 
B)  $18,000. 
C)  $35,000. 
D)  $40,000. 
A)  $10,000. 
B)  $18,000. 
C)  $35,000. 
D)  $40,000.

Question 13

The last-in, first-out (LIFO) method is based on the assumption that the units of inventories purchased last will be sold last.

Accepted Answer

A) True 
 B)False

Question 14

The _____ method of inventory valuation is based on the assumption that the last purchased units will be sold first.

Accepted Answer

A)  first-in, first-out (FIFO) 
B)  ​last-in, first-out (LIFO) 
C)  ​weighted-average-cost 
D)  standard-average-cost 
A)  first-in, first-out (FIFO) 
B)  ​last-in, first-out (LIFO) 
C)  ​weighted-average-cost 
D)  standard-average-cost

Question 15

Which of the following methods of inventory valuation is a compromise between the last-in, first-out (LIFO) method and the first-in, first-out (FIFO) method for both the amount of the ending inventory and the cost of goods sold?

Accepted Answer

A)  The weighted-average-cost method 
B)  The standard-average-cost method 
C)  The fixed cost method 
D)  The variable cost method 
A)  The weighted-average-cost method 
B)  The standard-average-cost method 
C)  The fixed cost method 
D)  The variable cost method

In the first-in, first-out (FIFO) method of inventory valuation, the ending inventory is valued at the most recent cost, referred to as:

In the _____ method of inventory valuation, the costs of the units left over in ending inventory will be from the items purchased earliest.

The _____ method of inventory valuation provides the most realistic amount for the Cost of Goods Sold section of the income statement.

The _____ method of inventory valuation is based on the assumption that the units purchased first will be sold first.

Mercury Corp. has 700 units in ending inventory worth $21,000. The average cost per unit is:

Which of the following mathematical expressions calculates the average cost per unit?

The _____ method of inventory valuation provides the most realistic amount of ending merchandise inventory in the Current Assets section of the balance sheet.

The weighted-average-cost method uses standard cost per unit to determine ending inventory value.

The first-in, first-out (FIFO) method is based on the assumption that the units of inventories purchased first will be sold first.

If average cost per unit is $120, then cost of ending inventory of 150 units using the weighted average cost method of inventory valuation is:

The last-in, first-out (LIFO) method is based on the assumption that the units of inventories purchased last will be sold last.

The _____ method of inventory valuation is based on the assumption that the last purchased units will be sold first.

Which of the following methods of inventory valuation is a compromise between the last-in, first-out (LIFO) method and the first-in, first-out (FIFO) method for both the amount of the ending inventory and the cost of goods sold?

Asset, Liability, Owners Equity, Revenue, and Expense Accounts

T Accounts, Debits and Credits, Trial Balance, and Financial Statements

The General Journal and the General Ledger

Adjusting Entries and the Work Sheet

Closing Entries and the Post-Closing Trial Balance

Bank Accounts, Cash Funds, and Internal Controls

Employee Earnings and Deductions

Employer Taxes, Payments, and Reports

Sales and Purchases

Cash Receipts and Cash Payments

Work Sheet and Adjusting Entries

Financial Statements, Closing Entries, and Reversing Entries

Methods of Depreciation

Bad Debts

Notes Receivablenotes Payable

Filters

Exam 15: Inventory Methods

In the first-in, first-out (FIFO) method of inventory valuation, the ending inventory is valued at the most recent cost, referred to as:

In the _____ method of inventory valuation, the costs of the units left over in ending inventory will be from the items purchased earliest.

The _____ method of inventory valuation provides the most realistic amount for the Cost of Goods Sold section of the income statement.​

The _____ method of inventory valuation is based on the assumption that the units purchased first will be sold first.

Mercury Corp. has 700 units in ending inventory worth $21,000. The average cost per unit is:

Which of the following mathematical expressions calculates the average cost per unit?

​The _____ method of inventory valuation provides the most realistic amount of ending merchandise inventory in the Current Assets section of the balance sheet.

The weighted-average-cost method uses standard cost per unit to determine ending inventory value.

The first-in, first-out (FIFO) method is based on the assumption that the units of inventories purchased first will be sold first.

If average cost per unit is $120, then cost of ending inventory of 150 units using the weighted average cost method of inventory valuation is:

The last-in, first-out (LIFO) method is based on the assumption that the units of inventories purchased last will be sold last.

The _____ method of inventory valuation is based on the assumption that the last purchased units will be sold first.

Which of the following methods of inventory valuation is a compromise between the last-in, first-out (LIFO) method and the first-in, first-out (FIFO) method for both the amount of the ending inventory and the cost of goods sold?

Asset, Liability, Owners Equity, Revenue, and Expense Accounts

T Accounts, Debits and Credits, Trial Balance, and Financial Statements

The General Journal and the General Ledger

Adjusting Entries and the Work Sheet

Closing Entries and the Post-Closing Trial Balance

Bank Accounts, Cash Funds, and Internal Controls

Employee Earnings and Deductions

Employer Taxes, Payments, and Reports

Sales and Purchases

Cash Receipts and Cash Payments

Work Sheet and Adjusting Entries

Financial Statements, Closing Entries, and Reversing Entries

Methods of Depreciation

Bad Debts

Notes Receivablenotes Payable

Filters

The _____ method of inventory valuation provides the most realistic amount for the Cost of Goods Sold section of the income statement.

The _____ method of inventory valuation provides the most realistic amount of ending merchandise inventory in the Current Assets section of the balance sheet.