Question 1

The consistent application of an inventory costing method is essential for

Accepted Answer

A)  conservatism. 
B)  accuracy. 
C)  comparability. 
D)  efficiency.

Question 2

If goods in transit are shipped FOB destination,

Accepted Answer

A)  the seller has legal title to the goods until they are delivered. 
B)  the buyer has legal title to the goods until they are delivered. 
C)  the transportation company has legal title to the goods while the goods are in transit. 
D)  no one has legal title to the goods until they are delivered.

Question 3

Storme Shutters has the following inventory information. $\begin{array}{rrr}
\text { Nov. }&1 & \text { Inventory } & 30 \text { units } @ \$ 8.00 \
&8 & \text { Purchase } & 120 \text { units } \$ 8.30 \
&17 & \text { Purchase } & 60 \text { units } \$ 8 .70 \
&25 & \text { Purchase } & 90 \text { units } \$ 8.80
\end{array}$ A physical count of merchandise inventory on November 30 reveals that there are 80 units on hand. Assume a periodic inventory system is used. Ending inventory under FIFO is

Accepted Answer

A)  $655. 
B)  $704. 
C)  $1,758. 
D)  $1,812.

Question 4

SportsTime uses a perpetual inventory system. Which of the following is not true?

Accepted Answer

A)  If they use FIFO, they charge to cost of goods sold the cost of the earliest goods on hand prior to each sale. 
B)  If they use LIFO, they charge to cost of goods sold the cost of the most recent purchase prior to sale. 
C)  If they use the moving-average (average-cost) method, they compute a new average cost after each sale. 
D)  If they use the moving-average (average-cost) method, a new average is computed by dividing the cost of goods available for sale by the units on hand.

Question 5

Bud's Place recorded the following data:

Under a periodic inventory system, the weighted average unit cost of the inventory at January 31 is:

Accepted Answer

A)  $ 2.40 
B)  $ 2.70 
C)  $ 2.80 
D)  $ 3.402

Exam 11: Inventory

The consistent application of an inventory costing method is essential for

If goods in transit are shipped FOB destination,

SportsTime uses a perpetual inventory system. Which of the following is not true?

Bud's Place recorded the following data: Under a periodic inventory system, the weighted average unit cost of the inventory at January 31 is: