Question 1

Use this inventory information for the month of July to answer the following question.   Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

Accepted Answer

A) $7,696 
B) $7,736 
C) $3,664 
D) $3,704 
A) $7,696 
B) $7,736 
C) $3,664 
D) $3,704

Question 2

A company has cost of goods available for sale of $250,000,sales of $305,000,and a gross profit percentage of 30 percent.Using the gross profit method,what is the ending inventory?

Accepted Answer

A) $95,000 
B) $50,000 
C) $36,500 
D) $158,500 
A) $95,000 
B) $50,000 
C) $36,500 
D) $158,500

Question 3

Why are the amounts determined for ending inventory and cost of goods sold the same under both the periodic and perpetual inventory systems when FIFO is used but not when LIFO is used?

Accepted Answer

FIFO will provide the same valuation res

Question 4

The portion of cost of goods available for sale that is not assigned to ending inventory is assigned to work in process.

Accepted Answer

A) True 
 B)False

Question 5

All of the following are inventory costing methods except

Accepted Answer

A) first-in,first-out. 
B) average-cost. 
C) periodic. 
D) specific identification. 
A) first-in,first-out. 
B) average-cost. 
C) periodic. 
D) specific identification.

Question 6

Use this information to answer the following question.   A periodic inventory system is used.
Using LIFO,cost of goods sold is

Accepted Answer

A) $3,480. 
B) $8,928. 
C) $2,664. 
D) $8,112. 
A) $3,480. 
B) $8,928. 
C) $2,664. 
D) $8,112.

Question 7

The higher the value assigned to ending inventory,the lower the gross margin.

Accepted Answer

A) True 
 B)False

Question 8

The specific identification method and the FIFO method produce the same results under both the perpetual and periodic inventory systems.

Accepted Answer

A) True 
 B)False

Question 9

In a period of rising prices,which inventory method is best to use for tax purposes?

Accepted Answer

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

Question 10

If prices were to never change,there would be no need for alternative inventory methods.

Accepted Answer

A) True 
 B)False

Question 11

When applying the retail method,which of the following would not be a component of the cost-to-retail percentage?

Accepted Answer

A) Purchases 
B) Beginning inventory 
C) Sales 
D) Freight-in 
A) Purchases 
B) Beginning inventory 
C) Sales 
D) Freight-in

Question 12

Which costing method can only be used when it is possible to identify units as coming from specific purchases?

Accepted Answer

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

Question 13

Use this inventory information for the month of March to answer the following question.   Assuming that a periodic inventory system is used,what is ending inventory (rounded)under the average-cost method?

Accepted Answer

A) $2,079 
B) $2,685 
C) $3,861 
D) $5,940 
A) $2,079 
B) $2,685 
C) $3,861 
D) $5,940

Question 14

When the average-cost method is applied to a perpetual inventory system,the sale of goods will not change the unit cost of the goods that remain in inventory.

Accepted Answer

A) True 
 B)False

Question 15

Atwood Company uses a periodic inventory system.During the first quarter of 2014,it sold 12,000 cases of Product A for $120,000.Facts related to its beginning inventory and purchases are as follows:
   For the quarter ended March 31,2014,compute the ending inventory,cost of goods sold,and gross margin under three methods: (a)average-cost,(b)FIFO,and (c)LIFO.(Show your work.)

Accepted Answer

@#IMG-DLM& ¹ (5,000 × $4)+ (3,000 × $5)+ (8,000 × $

Question 16

In periods of rising prices,the LIFO method will result in a larger gross margin than the FIFO method.

Accepted Answer

A) True 
 B)False

Question 17

Which costing method is used based on the reasoning that the fairest determination of income occurs if the current costs are matched against current sales prices?

Accepted Answer

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

Question 18

Why is the LIFO cost flow assumption an acceptable valuation method for merchandise inventory when it rarely matches the physical movement of the product?

Accepted Answer

LIFO is an acceptable inventory valuatio

Question 19

Use this information to answer the following question.   A periodic inventory system is used; ending inventory is 140 units.
What is cost of goods sold under FIFO?

Accepted Answer

A) $1,760 
B) $3,160 
C) $2,160 
D) $4,160 
A) $1,760 
B) $3,160 
C) $2,160 
D) $4,160

Question 20

Inventory turnover is a measure expressed in terms of a percentage.

Accepted Answer

A) True 
 B)False

Use this inventory information for the month of July to answer the following question. Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

A company has cost of goods available for sale of $250,000,sales of $305,000,and a gross profit percentage of 30 percent.Using the gross profit method,what is the ending inventory?

Why are the amounts determined for ending inventory and cost of goods sold the same under both the periodic and perpetual inventory systems when FIFO is used but not when LIFO is used?

The portion of cost of goods available for sale that is not assigned to ending inventory is assigned to work in process.

All of the following are inventory costing methods except

Use this information to answer the following question. A periodic inventory system is used. Using LIFO,cost of goods sold is

The higher the value assigned to ending inventory,the lower the gross margin.

The specific identification method and the FIFO method produce the same results under both the perpetual and periodic inventory systems.

In a period of rising prices,which inventory method is best to use for tax purposes?

If prices were to never change,there would be no need for alternative inventory methods.

When applying the retail method,which of the following would not be a component of the cost-to-retail percentage?

Which costing method can only be used when it is possible to identify units as coming from specific purchases?

Use this inventory information for the month of March to answer the following question. Assuming that a periodic inventory system is used,what is ending inventory (rounded)under the average-cost method?

When the average-cost method is applied to a perpetual inventory system,the sale of goods will not change the unit cost of the goods that remain in inventory.

In periods of rising prices,the LIFO method will result in a larger gross margin than the FIFO method.

Which costing method is used based on the reasoning that the fairest determination of income occurs if the current costs are matched against current sales prices?

Why is the LIFO cost flow assumption an acceptable valuation method for merchandise inventory when it rarely matches the physical movement of the product?

Use this information to answer the following question. A periodic inventory system is used; ending inventory is 140 units. What is cost of goods sold under FIFO?

Inventory turnover is a measure expressed in terms of a percentage.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

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Exam 7: Inventories

Use this inventory information for the month of July to answer the following question. Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

A company has cost of goods available for sale of $250,000,sales of $305,000,and a gross profit percentage of 30 percent.Using the gross profit method,what is the ending inventory?

Why are the amounts determined for ending inventory and cost of goods sold the same under both the periodic and perpetual inventory systems when FIFO is used but not when LIFO is used?

The portion of cost of goods available for sale that is not assigned to ending inventory is assigned to work in process.

All of the following are inventory costing methods except

Use this information to answer the following question. A periodic inventory system is used. Using LIFO,cost of goods sold is

The higher the value assigned to ending inventory,the lower the gross margin.

The specific identification method and the FIFO method produce the same results under both the perpetual and periodic inventory systems.

In a period of rising prices,which inventory method is best to use for tax purposes?

If prices were to never change,there would be no need for alternative inventory methods.

When applying the retail method,which of the following would not be a component of the cost-to-retail percentage?

Which costing method can only be used when it is possible to identify units as coming from specific purchases?

Use this inventory information for the month of March to answer the following question. Assuming that a periodic inventory system is used,what is ending inventory (rounded)under the average-cost method?

When the average-cost method is applied to a perpetual inventory system,the sale of goods will not change the unit cost of the goods that remain in inventory.

In periods of rising prices,the LIFO method will result in a larger gross margin than the FIFO method.

Which costing method is used based on the reasoning that the fairest determination of income occurs if the current costs are matched against current sales prices?

Why is the LIFO cost flow assumption an acceptable valuation method for merchandise inventory when it rarely matches the physical movement of the product?

Use this information to answer the following question. A periodic inventory system is used; ending inventory is 140 units. What is cost of goods sold under FIFO?

Inventory turnover is a measure expressed in terms of a percentage.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters