Question 1

Use this inventory information for the month of August to answer the following question.   Assuming that a perpetual inventory system is used,what is ending inventory on a FIFO basis?

Accepted Answer

A) $3,904 
B) $3,984 
C) $4,024 
D) More information is needed. 
A) $3,904 
B) $3,984 
C) $4,024 
D) More information is needed.

Question 2

In which of the following cases would the gross profit method most likely be used?

Accepted Answer

A) In a company with good accounting records 
B) In applying the average-cost method 
C) In estimating the market value of inventory for application of the lower-of-cost-or-market rule 
D) In estimating an inventory loss from fire 
A) In a company with good accounting records 
B) In applying the average-cost method 
C) In estimating the market value of inventory for application of the lower-of-cost-or-market rule 
D) In estimating an inventory loss from fire

Question 3

When applying the lower-of-cost-or-market rule to inventory valuation,market generally means

Accepted Answer

A) original cost,less physical deterioration. 
B) replacement cost. 
C) original cost. 
D) resale value. 
A) original cost,less physical deterioration. 
B) replacement cost. 
C) original cost. 
D) resale value.

Question 4

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Accepted Answer

A) True 
 B)False

Question 5

Applying the lower-of-cost-or-market rule follows which of the following accounting conventions?

Accepted Answer

A) Full disclosure 
B) Matching 
C) Materiality 
D) Conservatism 
A) Full disclosure 
B) Matching 
C) Materiality 
D) Conservatism

Question 6

Graczyk Company uses a periodic inventory system.During October,it sold 360 units of Product Z.Its beginning inventory and purchases during the month were as follows:
   Compute the cost of goods sold under each of three methods: (a)average-cost,(b)LIFO,and (c)FIFO.(Show your work.)

Accepted Answer

a. Average-cost: (100 × $20)+ (100 × $24

Question 7

To increase their levels of inventory,many merchandisers and manufacturers use supply-chain management in conjunction with a just-in-time operating environment.

Accepted Answer

A) True 
 B)False

Question 8

In accounting for inventory,the assumed cost flow need not match the physical goods flow.

Accepted Answer

A) True 
 B)False

Question 9

Use this inventory information for the month of March to answer the following question.   Assume that a periodic inventory system is used.
What is ending inventory under the LIFO method?

Accepted Answer

A) $1,680 
B) $1,980 
C) More information is needed. 
D) $2,720 
A) $1,680 
B) $1,980 
C) More information is needed. 
D) $2,720

Question 10

Use this inventory information for the month of May to answer the following questions.   Assuming that a perpetual inventory system is used,what is ending inventory on a LIFO basis?

Accepted Answer

A) More information is needed. 
B) $10,240 
C) $5,440 
D) $5,760 
A) More information is needed. 
B) $10,240 
C) $5,440 
D) $5,760

Question 11

The detailed records of purchases and sales maintained under the perpetual inventory system make which costing method more practical than when a periodic system is used?

Accepted Answer

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

Question 12

A retail store has beginning inventory of $30,000,purchases of $220,000,sales of $200,000,and a normal gross margin of 25 percent.What is estimated inventory based on these facts and the gross profit method?

Accepted Answer

A) $50,000 
B) $150,000 
C) $100,000 
D) $200,000 
A) $50,000 
B) $150,000 
C) $100,000 
D) $200,000

Question 13

An understatement of year 1's beginning inventory will

Accepted Answer

A) cause year 2's gross margin to be overstated. 
B) cause year 1's cost of goods sold to be understated. 
C) cause year 2's gross margin to be understated. 
D) have no effect on year 1's gross margin. 
A) cause year 2's gross margin to be overstated. 
B) cause year 1's cost of goods sold to be understated. 
C) cause year 2's gross margin to be understated. 
D) have no effect on year 1's gross margin.

Question 14

Use this information to answer the following question.   A periodic inventory system is used.
Ending inventory under LIFO is

Accepted Answer

A) $452. 
B) $429. 
C) $214. 
D) $237. 
A) $452. 
B) $429. 
C) $214. 
D) $237.

Question 15

Days' inventory on hand equals the inventory turnover divided by 365.

Accepted Answer

A) True 
 B)False

Question 16

How is the matching rule applied when accounting for merchandise inventory?

Accepted Answer

Merchandise inventory is classified as a

Question 17

Which of the following methods generally is used to determine the loss when inventory is destroyed or stolen?

Accepted Answer

A) Retail method 
B) FIFO 
C) LIFO 
D) Gross profit method 
A) Retail method 
B) FIFO 
C) LIFO 
D) Gross profit method

Question 18

Which costing method assumes that the cost of the first few items acquired should be assigned to the first items sold?

Accepted Answer

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

Question 19

Use this information to answer the following question.   A periodic inventory system is used.
Cost of goods sold under the average-cost method is

Accepted Answer

A) $444. 
B) $333. 
C) $435. 
D) $222. 
A) $444. 
B) $333. 
C) $435. 
D) $222.

Question 20

Which of the following costs usually would not be included in the inventory cost?

Accepted Answer

A) Storage costs 
B) Related tariffs 
C) Invoice price less purchases discounts 
D) Insurance on goods in transit 
A) Storage costs 
B) Related tariffs 
C) Invoice price less purchases discounts 
D) Insurance on goods in transit

Use this inventory information for the month of August to answer the following question. Assuming that a perpetual inventory system is used,what is ending inventory on a FIFO basis?

In which of the following cases would the gross profit method most likely be used?

When applying the lower-of-cost-or-market rule to inventory valuation,market generally means

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Applying the lower-of-cost-or-market rule follows which of the following accounting conventions?

Graczyk Company uses a periodic inventory system.During October,it sold 360 units of Product Z.Its beginning inventory and purchases during the month were as follows: Compute the cost of goods sold under each of three methods: (a)average-cost,(b)LIFO,and (c)FIFO.(Show your work.)

To increase their levels of inventory,many merchandisers and manufacturers use supply-chain management in conjunction with a just-in-time operating environment.

In accounting for inventory,the assumed cost flow need not match the physical goods flow.

Use this inventory information for the month of March to answer the following question. Assume that a periodic inventory system is used. What is ending inventory under the LIFO method?

Use this inventory information for the month of May to answer the following questions. Assuming that a perpetual inventory system is used,what is ending inventory on a LIFO basis?

The detailed records of purchases and sales maintained under the perpetual inventory system make which costing method more practical than when a periodic system is used?

A retail store has beginning inventory of $30,000,purchases of $220,000,sales of $200,000,and a normal gross margin of 25 percent.What is estimated inventory based on these facts and the gross profit method?

An understatement of year 1's beginning inventory will

Use this information to answer the following question. A periodic inventory system is used. Ending inventory under LIFO is

Days' inventory on hand equals the inventory turnover divided by 365.

How is the matching rule applied when accounting for merchandise inventory?

Which of the following methods generally is used to determine the loss when inventory is destroyed or stolen?

Which costing method assumes that the cost of the first few items acquired should be assigned to the first items sold?

Use this information to answer the following question. A periodic inventory system is used. Cost of goods sold under the average-cost method is

Which of the following costs usually would not be included in the inventory cost?

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 August to answer the following question. Assuming that a perpetual inventory system is used,what is ending inventory on a FIFO basis?

In which of the following cases would the gross profit method most likely be used?

When applying the lower-of-cost-or-market rule to inventory valuation,market generally means

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Applying the lower-of-cost-or-market rule follows which of the following accounting conventions?

Graczyk Company uses a periodic inventory system.During October,it sold 360 units of Product Z.Its beginning inventory and purchases during the month were as follows: Compute the cost of goods sold under each of three methods: (a)average-cost,(b)LIFO,and (c)FIFO.(Show your work.)

To increase their levels of inventory,many merchandisers and manufacturers use supply-chain management in conjunction with a just-in-time operating environment.

In accounting for inventory,the assumed cost flow need not match the physical goods flow.

Use this inventory information for the month of March to answer the following question. Assume that a periodic inventory system is used. What is ending inventory under the LIFO method?

Use this inventory information for the month of May to answer the following questions. Assuming that a perpetual inventory system is used,what is ending inventory on a LIFO basis?

The detailed records of purchases and sales maintained under the perpetual inventory system make which costing method more practical than when a periodic system is used?

A retail store has beginning inventory of $30,000,purchases of $220,000,sales of $200,000,and a normal gross margin of 25 percent.What is estimated inventory based on these facts and the gross profit method?

An understatement of year 1's beginning inventory will

Use this information to answer the following question. A periodic inventory system is used. Ending inventory under LIFO is

Days' inventory on hand equals the inventory turnover divided by 365.

How is the matching rule applied when accounting for merchandise inventory?

Which of the following methods generally is used to determine the loss when inventory is destroyed or stolen?

Which costing method assumes that the cost of the first few items acquired should be assigned to the first items sold?

Use this information to answer the following question. A periodic inventory system is used. Cost of goods sold under the average-cost method is

Which of the following costs usually would not be included in the inventory cost?

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