Question 1

If ending inventory is understated, then cost of goods sold is understated.

Accepted Answer

A) True 
 B)False

Question 2

In a periodic inventory system, the cost of purchases is recognized as

Accepted Answer

A) an integral part of the calculation of cost of goods sold. 
B) the only part of the calculation of cost of goods sold. 
C) an increase in the inventory account. 
D) an increase in an asset account. 
A) an integral part of the calculation of cost of goods sold. 
B) the only part of the calculation of cost of goods sold. 
C) an increase in the inventory account. 
D) an increase in an asset account.

Question 3

Match the terms with the descriptions provided.
-Under the perpetual inventory system, a reduction in the inventory account balance not caused by a sale or return.

Accepted Answer

A) Consignment 
B) Discount period 
C) Inventory 
D) LIFO Reserve 
E) Lower of cost or market rule
F)Purchase allowance
G)Purchase discounts
H)Purchase returns
I)Purchases 
A) Consignment 
B) Discount period 
C) Inventory 
D) LIFO Reserve 
E) Lower of cost or market rule
F)Purchase allowance
G)Purchase discounts
H)Purchase returns
I)Purchases

Question 4

The following data are available for one item of merchandise sold by Jocque Fabrics, which uses a periodic inventory system.  
-Refer to the information provided for Jocque Fabrics. If the company uses the FIFO method, determine the following amounts:
A) Ending inventory on February 28th
B) Cost of Goods sold for the month of February
C) Gross Margin for February

Accepted Answer

A)[(100 − 84) × $12] + (30 × $

Question 5

Irwin Company counted its ending inventory as $178,000 at year-end, January 31, 2019. Upon review of the records, it was noted that the following items were in transit during the count: - Goods totaling $2,000 shipped by the supplier FOB destination on January 31 were received February 5th and were not counted by Irwin Company.
- Goods totaling $5,000 shipped by the supplier FOB shipping point on January 30 were received February 2nd and were not counted by Irwin Company.
- Goods totaling $6,000 shipped by Irwin Company to a customer FOB shipping point on January 31 were received by the customer on February 3rd and were counted by Irwin Company.
What is Irwin Company's correct inventory balance on January 31, 2019?

Accepted Answer

A) $172,000 
B) $174,000 
C) $177,000 
D) $178,000 
A) $172,000 
B) $174,000 
C) $177,000 
D) $178,000

Question 6

Match the terms with the descriptions provided.
-Measures how quickly merchandise is purchased and sold.

Accepted Answer

A) Average days to sell inventory 
B) Gross margin 
C) Gross profit ratio 
D) Inventory turnover ratio 
E) Freight-in
F)Freight-out 
A) Average days to sell inventory 
B) Gross margin 
C) Gross profit ratio 
D) Inventory turnover ratio 
E) Freight-in
F)Freight-out

Question 7

Match the terms with the descriptions related to merchandise sales and purchases.
-Requires updating of the inventory account at the time of each purchase and each sale.

Accepted Answer

A) Transportation-in 
B) Perpetual inventory system 
C) Net purchases 
D) FOB destination 
E) Cost of goods available for sale
F)Periodic inventory system
G)FOB shipping point
H)Delivery expense 
A) Transportation-in 
B) Perpetual inventory system 
C) Net purchases 
D) FOB destination 
E) Cost of goods available for sale
F)Periodic inventory system
G)FOB shipping point
H)Delivery expense

Question 8

The inventory of a(n) ____________________ consists of three categories: raw materials, work-in-process, and finished goods.

Accepted Answer

manufactur

Question 9

The lower of cost or market (LCM) rule violates the historical cost principle.

Accepted Answer

A) True 
 B)False

Question 10

Match the terms with the descriptions provided.
-General term for companies who sell goods to other companies as well as to the final consumer.

Accepted Answer

A) Manufacturers 
B) Merchandisers 
C) Retailers 
D) Wholesalers 
E) Service companies 
A) Manufacturers 
B) Merchandisers 
C) Retailers 
D) Wholesalers 
E) Service companies

Question 11

Which inventory costing method results in the highest inventory balance during a period of rising purchase prices?

Accepted Answer

A) weighted average cost 
B) FIFO 
C) LIFO 
D) Both FIFO and LIFO result in the same inventory balance. 
A) weighted average cost 
B) FIFO 
C) LIFO 
D) Both FIFO and LIFO result in the same inventory balance.

Question 12

Match the terms with the descriptions related to merchandise sales and purchases.
-Gave a customer a cash refund.

Accepted Answer

A) Transportation-in 
B) Perpetual inventory system 
C) Net purchases 
D) FOB destination 
E) Cost of goods available for sale
F)Periodic inventory system
G)FOB shipping point
H)Delivery expense 
A) Transportation-in 
B) Perpetual inventory system 
C) Net purchases 
D) FOB destination 
E) Cost of goods available for sale
F)Periodic inventory system
G)FOB shipping point
H)Delivery expense

If ending inventory is understated, then cost of goods sold is understated.

In a periodic inventory system, the cost of purchases is recognized as

Match the terms with the descriptions provided. -Under the perpetual inventory system, a reduction in the inventory account balance not caused by a sale or return.

Match the terms with the descriptions provided. -Measures how quickly merchandise is purchased and sold.

Match the terms with the descriptions related to merchandise sales and purchases. -Requires updating of the inventory account at the time of each purchase and each sale.

The inventory of a(n) ____________________ consists of three categories: raw materials, work-in-process, and finished goods.

The lower of cost or market (LCM) rule violates the historical cost principle.

Match the terms with the descriptions provided. -General term for companies who sell goods to other companies as well as to the final consumer.

Which inventory costing method results in the highest inventory balance during a period of rising purchase prices?

Match the terms with the descriptions related to merchandise sales and purchases. -Gave a customer a cash refund.

Accounting and The Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Finance and Stock Market Equilibrium

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Exam 6: Cost Of Goods Sold and Inventory

If ending inventory is understated, then cost of goods sold is understated.

In a periodic inventory system, the cost of purchases is recognized as

Match the terms with the descriptions provided. -Under the perpetual inventory system, a reduction in the inventory account balance not caused by a sale or return.

Match the terms with the descriptions provided. -Measures how quickly merchandise is purchased and sold.

Match the terms with the descriptions related to merchandise sales and purchases. -Requires updating of the inventory account at the time of each purchase and each sale.

The inventory of a(n) ____________________ consists of three categories: raw materials, work-in-process, and finished goods.

The lower of cost or market (LCM) rule violates the historical cost principle.

Match the terms with the descriptions provided. -General term for companies who sell goods to other companies as well as to the final consumer.

Which inventory costing method results in the highest inventory balance during a period of rising purchase prices?

Match the terms with the descriptions related to merchandise sales and purchases. -Gave a customer a cash refund.

Accounting and The Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Finance and Stock Market Equilibrium

Filters