Question 1

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the goods sold.

Accepted Answer

A) True 
 B)False

Question 2

A physical inventory should be taken at the end of every month.

Accepted Answer

A) True 
 B)False

Question 3

Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items?

Accepted Answer

A)  $8,850
B)  $9,000
C)  $9,100
D)  $9,250E) C) and D)
F) None of the above

Question 4

The following lots of a Commodity P were available for sale during the year. Use this information to answer the questions that follow.​
Beginning inventory
5 units at $61
First purchase
15 units at $63
Second purchase
10 units at $74
Third purchase
10 units at $77
The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year.
-What is the year-end inventory balance using the LIFO method? Use the information provided in the table to answer this question

Accepted Answer

A)  $1,380
B)  $1,375
C)  $1,510
D)  $1,250E) A) and B)
F) B) and C)

Question 5

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. 
-Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO periodic inventory method.

Accepted Answer

A)  Total sales: $56,975.00 Cost of goods sold: $36,431.25Gross profit: $20,543.75Ending inventory: $19,981.2
B)  Total sales: $56,975.00 Cost of goods sold: $36,587.50Gross profit: $20,387.50Ending inventory: $19,825.00
C)  Total sales: $56,975.00 Cost of goods sold: $37,312.50Gross profit: $19,662.50Ending inventory: $19,573.25
D)  Total sales: $56,975.00 Cost of goods sold: $37,401.75Gross profit: $19,573.25Ending inventory: $19,010.75E) B) and C)
F) None of the above

Question 6

Match each description to the appropriate cost flow assumption (a-c).
-Produces the same cost of goods sold under both the periodic and the perpetual inventory systems
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

The answer of Match each description to the appropriate cost...

Question 7

Beginning inventory, purchases, and sales for an inventory item are as follows:  The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO?

Accepted Answer

($755 × 30 units) + ...

Question 8

Match each description to the appropriate cost flow assumption (a-d).
-Cost flow is in the order in which the costs were incurred.
A)Weighted average
B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Accepted Answer

The answer of Match each description to the appropriate cost...

Question 9

Inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

Accepted Answer

A)  net income is understated
B)  net income is overstated
C)  cost of goods sold is understated
D)  inventory reported on the balance sheet is overstatedE) A) and B)
F) A) and C)

Question 10

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of goods sold is

Accepted Answer

A)  FIFO
B)  LIFO
C)  average cost
D)  weighted averageE) A) and C)
F) None of the above

Question 11

The weighted average cost method will always yield results between FIFO and LIFO.

Accepted Answer

A) True 
 B)False

Question 12

Match each description to the appropriate cost flow assumption (a-c).
-Never results in either the highest or lowest possible net income
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

The answer of Match each description to the appropriate cost...

Question 13

During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Accepted Answer

A) True 
 B)False

Question 14

Match each situation to its impact (a-c) on the current year's net income.
a.Net income for the current year will be overstated.b.Net income for the current year will be understated.c.There will be no error effect on net income.
-Merchandise that was sold and shipped FOB destination on the last day of the year was not included in the seller's ending inventory.

Accepted Answer

The answer of Match each situation to its impact (a-c)...

Question 15

Match each description to the appropriate cost flow assumption (a-d).
-Cost flow is assumed to be in the reverse order of costs incurred.
A)Weighted average
B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Accepted Answer

The answer of Match each description to the appropriate cost...

Question 16

The following data were taken from Castle, Inc.Cost of goods sold $894,000
Inventory, end of year
78,000
Inventory, beginning of the year
92,000
What is (1)  the inventory turnover ratio and (2)  the number of days' sales in inventory for Castle Inc.

Accepted Answer

A)  (1)  11.46 times (2)  31.85 days
B)  (1)  10.52 times (2)  34.70 days
C)  (1)  9.72 times (2)  37.56 days
D)  (1)  10.53 times (2)  34.56 daysE) C) and D)
F) All of the above

Question 17

The following lots of Commodity D were available for sale during the year. Use this information to answer the questions that follow.  The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year.​
-What is the ending inventory balance at the end of the year using the LIFO method?

Accepted Answer

A)  $1,685
B)  $1,575
C)  $1,805
D)  $3,815E) B) and D)
F) C) and D)

Question 18

1. Explain the effect of the following on the financial statements:
Goods held on consignment were included in the ending inventory count.​
Goods purchased FOB shipping point were in transit on the last day of the year.The goods were not counted as part of ending inventory.​
Goods sold FOB shipping point were in transit on the last day of the year.These goods were not counted as part of ending inventory.​
2. What happens if inventory errors are not found and corrected?

Accepted Answer

1. Goods held on consignment were includ...

Question 19

If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the

Accepted Answer

A)  consignee
B)  retailer
C)  manufacturer
D)  shipperE) C) and D)
F) B) and C)

Question 20

The lower of cost or market is a method of inventory valuation.

Accepted Answer

A) True 
 B)False

Exam 6: Inventories

The weighted average cost method will always yield results between FIFO and LIFO.

Correct Answer
verified

Match each description to the appropriate cost flow assumption (a-c). -Never results in either the highest or lowest possible net income A)FIFO B)LIFO C)Weighted average

Correct Answer
verified

If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the

Correct Answer
verified

Correct Answer
verified

Beginning inventory, purchases, and sales for an inventory item are as follows: The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO?

Correct Answer
verified
($755 × 30 units) + ...
View Answer

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is assumed to be in the reverse order of costs incurred. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Correct Answer
verified

Correct Answer
verified

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the goods sold.

Correct Answer
verified

Correct Answer
verified
1. Goods held on consignment were includ...
View Answer

Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items?

Correct Answer
verified

During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Correct Answer
verified

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of goods sold is

Correct Answer
verified

The following data were taken from Castle, Inc.Cost of goods sold $894,000 Inventory, end of year 78,000 Inventory, beginning of the year 92,000 What is (1) the inventory turnover ratio and (2) the number of days' sales in inventory for Castle Inc.

Correct Answer
verified

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO periodic inventory method.

Correct Answer
verified

The lower of cost or market is a method of inventory valuation.

Correct Answer
verified

Correct Answer
verified

Match each description to the appropriate cost flow assumption (a-c). -Produces the same cost of goods sold under both the periodic and the perpetual inventory systems A)FIFO B)LIFO C)Weighted average

Correct Answer
verified

A physical inventory should be taken at the end of every month.

Correct Answer
verified

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is in the order in which the costs were incurred. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Correct Answer
verified

Inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

Correct Answer
verified

Exam 6: Inventories

The weighted average cost method will always yield results between FIFO and LIFO.

Correct AnswerverifiedShow Answer

Match each description to the appropriate cost flow assumption (a-c). -Never results in either the highest or lowest possible net income A)FIFO B)LIFO C)Weighted average

Correct AnswerverifiedShow Answer

If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Beginning inventory, purchases, and sales for an inventory item are as follows: The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO?

Correct Answerverified($755 × 30 units) + ...View AnswerShow Answer

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is assumed to be in the reverse order of costs incurred. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the goods sold.

Correct AnswerverifiedShow Answer

Correct Answerverified1. Goods held on consignment were includ...View AnswerShow Answer

Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items?

Correct AnswerverifiedShow Answer

During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Correct AnswerverifiedShow Answer

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of goods sold is

Correct AnswerverifiedShow Answer

The following data were taken from Castle, Inc.Cost of goods sold $894,000 Inventory, end of year 78,000 Inventory, beginning of the year 92,000 What is (1) the inventory turnover ratio and (2) the number of days' sales in inventory for Castle Inc.

Correct AnswerverifiedShow Answer

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO periodic inventory method.

Correct AnswerverifiedShow Answer

The lower of cost or market is a method of inventory valuation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match each description to the appropriate cost flow assumption (a-c). -Produces the same cost of goods sold under both the periodic and the perpetual inventory systems A)FIFO B)LIFO C)Weighted average

Correct AnswerverifiedShow Answer

A physical inventory should be taken at the end of every month.

Correct AnswerverifiedShow Answer

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is in the order in which the costs were incurred. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Correct AnswerverifiedShow Answer

Inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

Correct AnswerverifiedShow Answer

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($755 × 30 units) + ...
View Answer

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Correct Answer
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1. Goods held on consignment were includ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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