Question 1

The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost,and also mimics the actual flow of goods for most businesses is:

Accepted Answer

A)  FIFO.
B)  Weighted average.
C)  LIFO.
D)  Specific identification.
E)  Lower of cost or market.F) None of the above
G) A) and C)

Question 2

On April 24 of the current year,The Memphis Pecan Company experienced a tornado that destroyed the company's entire inventory.At the beginning of April,the company reported beginning inventory of $226,750.Inventory purchased during April (until the date of the tornado) was $197,800.Sales for the month of April through April 24 were $642,500.Assuming the company's typical gross profit ratio is 50%,estimate the amount of inventory destroyed in the tornado.

Accepted Answer

A)  $212,275
B)  $103,300
C)  $217,950
D)  $321,250
E)  $157,788F) B) and E)
G) A) and C)

Question 3

Beckenworth had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its days' sales in inventory equals:

Accepted Answer

A)  0.21.
B)  4.51.
C)  4.79.
D)  76.1 days.
E)  80.9 days.F) A) and B)
G) All of the above

Question 4

Calculate the ending inventory using LIFO for a company that uses a perpetual inventory system,using the information given below.

Accepted Answer

The answer of Calculate the ending inventory using LIFO for...

Question 5

During a period of steadily rising costs,the inventory valuation method that yields the highest reported net income is:

Accepted Answer

A)  Specific identification method.
B)  Average cost method.
C)  Weighted-average method.
D)  FIFO method.
E)  LIFO method.F) A) and B)
G) A) and C)

Question 6

A company's current inventory consists of 5,000 units purchased at $6 per unit.Replacement cost has now fallen to $5 per unit.What is the entry the company must record to adjust inventory to market?

Accepted Answer

A)  Debit Merchandise Inventory $25,000;credit Cost of Goods Sold $25,000.
B)  Debit Cost of Goods Sold $30,000;credit Merchandise Inventory $30,000.
C)  Debit Cost of Goods Sold $5,000;credit Merchandise Inventory $5,000.
D)  Debit Loss on Inventory $5,000;credit Cost of Goods Sold $5,000.
E)  Debit Merchandise Inventory $30,000;credit Cost of Goods Sold $25,000.F) None of the above
G) A) and E)

Question 7

When costs to purchase inventory regularly decline,which method of inventory costing will yield the lowest cost of goods sold?

Accepted Answer

A)  FIFO.
B)  LIFO.
C)  Weighted average.
D)  Specific identification.
E)  Gross margin.F) All of the above
G) None of the above

Question 8

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

Accepted Answer

A)  $3,485.
B)  $3,445.
C)  $3,500.
D)  $3,472.
E)  $3,461.F) None of the above
G) C) and D)

Question 9

IFRS reporting currently does not allow which method of inventory costing?

Accepted Answer

A)  Specific identification.
B)  FIFO.
C)  LIFO.
D)  Weighted average.
E)  Lower of cost or market.F) A) and B)
G) A) and E)

Question 10

Apply the retail method to the following company information to calculate the cost of the ending inventory for the current period.

Accepted Answer

The answer of Apply the retail method to the following...

Question 11

A company's warehouse contents were destroyed by a flood on September 12.The following information was the only information that was salvaged: 1.Inventory,beginning: $28,000
2) Purchases for the period: $17,000
3) Sales for the period: $55,000
4) Sales returns for the period: $700
The company's average gross profit ratio is 35%.What is the estimated cost of the lost inventory?

Accepted Answer

A)  $9,705.
B)  $25,995.
C)  $29,250.
D)  $44,000.
E)  $45,000.F) All of the above
G) None of the above

Question 12

Jefferson Company has sales of $300,000 and cost of goods available for sale of $270,000.If the gross profit ratio is typically 30%,the estimated cost of the ending inventory under the gross profit method would be:

Accepted Answer

A)  $60,000
B)  $180,000
C)  $30,000
D)  $90,000
E)  $120,000F) A) and E)
G) None of the above

Question 13

Use the following information for Ephron Company to compute days' sales in inventory for 2015.

Accepted Answer

A)  52.4
B)  82.3
C)  50.5
D)  76.8
E)  79.3F) None of the above
G) B) and D)

Question 14

Given the following information,determine the cost of the inventory at June 30 using the LIFO perpetual inventory method.  The cost of the ending inventory is:

Accepted Answer

A)  $200
B)  $220
C)  $380
D)  $275
E)  $300F) B) and E)
G) C) and E)

Question 15

A company reported the current month purchase and sales data for its only product and uses the perpetual inventory system.Determine the cost assigned to ending inventory and cost of goods sold using FIFO.

Accepted Answer

The answer of A company reported the current month purchase...

Question 16

Acceptable methods of assigning specific costs to inventory and cost of goods sold include all of the following except:

Accepted Answer

A)  LIFO method.
B)  FIFO method.
C)  Specific identification method.
D)  Weighted average method.
E)  Retail method.F) A) and E)
G) D) and E)

Question 17

The _________________ method is commonly used to estimate the value of inventory that has been destroyed,lost,or stolen.

Accepted Answer

The answer of The _________________ method is commonly used to...

Question 18

Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except:

Accepted Answer

A)  Prenumbered inventory tickets.
B)  A manager confirms that all inventories are ticketed only once.
C)  Counters confirm the validity of inventory existence,amounts,and quality.
D)  Second counts by a different counter.
E)  Counters of inventory should be those who are responsible for the inventory.F) C) and E)
G) D) and E)

Question 19

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

Accepted Answer

A)  $3,485.
B)  $3,445.
C)  $3,500.
D)  $3,472.
E)  $3,461.F) All of the above
G) A) and E)

Question 20

Avanti purchases inventory from overseas and incurs the following costs: the merchandise cost is $50,000,credit terms 2/10,n/30 that apply only to the $50,000;FOB shipping point freight charges are $1,500;insurance during transit is $500;and import duties are $1,000.Avanti paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions.Compute the cost that should be assigned to the inventory.

Accepted Answer

A)  $50,000
B)  $53,000
C)  $52,000
D)  $51,500
E)  $53,200F) C) and E)
G) C) and D)

Exam 6: Inventories and Cost of Sales

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

Correct Answer
verified

Jefferson Company has sales of $300,000 and cost of goods available for sale of $270,000.If the gross profit ratio is typically 30%,the estimated cost of the ending inventory under the gross profit method would be:

Correct Answer
verified

Correct Answer
verified

Apply the retail method to the following company information to calculate the cost of the ending inventory for the current period.

Correct Answer
verified

Given the following information,determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. The cost of the ending inventory is:

Correct Answer
verified

When costs to purchase inventory regularly decline,which method of inventory costing will yield the lowest cost of goods sold?

Correct Answer
verified

Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except:

Correct Answer
verified

The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost,and also mimics the actual flow of goods for most businesses is:

Correct Answer
verified

Correct Answer
verified

The _________________ method is commonly used to estimate the value of inventory that has been destroyed,lost,or stolen.

Correct Answer
verified

A company reported the current month purchase and sales data for its only product and uses the perpetual inventory system.Determine the cost assigned to ending inventory and cost of goods sold using FIFO.

Correct Answer
verified

Beckenworth had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its days' sales in inventory equals:

Correct Answer
verified

IFRS reporting currently does not allow which method of inventory costing?

Correct Answer
verified

Acceptable methods of assigning specific costs to inventory and cost of goods sold include all of the following except:

Correct Answer
verified

Calculate the ending inventory using LIFO for a company that uses a perpetual inventory system,using the information given below.

Correct Answer
verified

Use the following information for Ephron Company to compute days' sales in inventory for 2015.

Correct Answer
verified

A company's current inventory consists of 5,000 units purchased at $6 per unit.Replacement cost has now fallen to $5 per unit.What is the entry the company must record to adjust inventory to market?

Correct Answer
verified

Correct Answer
verified

During a period of steadily rising costs,the inventory valuation method that yields the highest reported net income is:

Correct Answer
verified

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

Correct Answer
verified

Exam 6: Inventories and Cost of Sales

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

Correct AnswerverifiedShow Answer

Jefferson Company has sales of $300,000 and cost of goods available for sale of $270,000.If the gross profit ratio is typically 30%,the estimated cost of the ending inventory under the gross profit method would be:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Apply the retail method to the following company information to calculate the cost of the ending inventory for the current period.

Correct AnswerverifiedShow Answer

Given the following information,determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. The cost of the ending inventory is:

Correct AnswerverifiedShow Answer

When costs to purchase inventory regularly decline,which method of inventory costing will yield the lowest cost of goods sold?

Correct AnswerverifiedShow Answer

Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except:

Correct AnswerverifiedShow Answer

The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost,and also mimics the actual flow of goods for most businesses is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The _________________ method is commonly used to estimate the value of inventory that has been destroyed,lost,or stolen.

Correct AnswerverifiedShow Answer

A company reported the current month purchase and sales data for its only product and uses the perpetual inventory system.Determine the cost assigned to ending inventory and cost of goods sold using FIFO.

Correct AnswerverifiedShow Answer

Beckenworth had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its days' sales in inventory equals:

Correct AnswerverifiedShow Answer

IFRS reporting currently does not allow which method of inventory costing?

Correct AnswerverifiedShow Answer

Acceptable methods of assigning specific costs to inventory and cost of goods sold include all of the following except:

Correct AnswerverifiedShow Answer

Calculate the ending inventory using LIFO for a company that uses a perpetual inventory system,using the information given below.

Correct AnswerverifiedShow Answer

Use the following information for Ephron Company to compute days' sales in inventory for 2015.

Correct AnswerverifiedShow Answer

A company's current inventory consists of 5,000 units purchased at $6 per unit.Replacement cost has now fallen to $5 per unit.What is the entry the company must record to adjust inventory to market?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

During a period of steadily rising costs,the inventory valuation method that yields the highest reported net income is:

Correct AnswerverifiedShow Answer

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified