Question 1

Match the terms with the descriptions provided.
-Reduce the amount that is owed to the seller for payment within the discount period.

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 2

The following information is from Gbane Company's accounting records for the year ended December 31:
  
-Refer to the information provided for Gbane Company. Using the cost of goods sold model, how much will the company report as its cost of goods sold in its income statement for the year ended December 31?

Accepted Answer

A) $215,880 
B) $218,760 
C) $224,280 
D) $228,840 
A) $215,880 
B) $218,760 
C) $224,280 
D) $228,840

Question 3

Presented below is a partially-completed income statement for Waddy Corp. for the year ended December 31. Determine the missing amounts for each letter.

Accepted Answer

A)$125,000 cost of goods sold + $75,000

Question 4

Stallworth Corp. uses a periodic inventory system. The following information is available for the month of November:
  
-Refer to the information provided for Stallworth Corp. If the company uses the FIFO inventory costing method, the amount assigned to the November 30th inventory would be

Accepted Answer

A) $1,505.00. 
B) $1,517.50. 
C) $2,109.00. 
D) $2,121.50. 
A) $1,505.00. 
B) $1,517.50. 
C) $2,109.00. 
D) $2,121.50.

Question 5

On September 1, Serrano Company purchased 70 units of Product A for $35,000 cash and also paid $1,500 transportation costs related to this purchase. On the same date, Serrano Company purchased 100 units of Product B for $10,000 on credit; however, the seller paid the $1,200 freight. The credit terms for Product B were 2/10, n/30. On September 3rd, Serrano Company determined that 5 units of Product A were defective, so they were returned to the seller. Serrano Company paid for its purchase of Product B on September 9th. On September 10th, Serrano Company purchased 90 units of Product C for $8,000 on credit with terms 1/10, n/30. The seller paid the freight. Serrano Company paid for its purchase of Product C on September 21st.
-Refer to the information presented for Serrano Company. On September 12th, Serrano Company sold 10 units of Product B to customers for $180 each. Serrano Company had paid $100 for each unit of Product B when it purchased them from the supplier on September 1st. On September 15th, customers returned 2 units of Product B for a cash refund.
Record the journal entries for this sale and sales return assuming the company uses a periodic inventory system.

Accepted Answer

The answer of On September 1, Serrano Company purchased 70...

Question 6

Draw and label T-accounts to illustrate the relationship between the various inventory accounts and cost of goods sold for: (a) a merchandiser; and (b) a manufacturer. Use the following account titles: Cost of Goods Sold, Finished Goods Inventory, Merchandise Inventory, Raw Materials Inventory, Work-in-Process Inventory, and Other Production Costs.

Accepted Answer

The answer of Draw and label T-accounts to illustrate the...

Question 7

How are purchase returns and purchase discounts recorded by a company using the periodic inventory system?

Accepted Answer

A) as a reduction to the Purchases account 
B) in contra-accounts to the Purchases account 
C) as operating expenses 
D) as miscellaneous expenses 
A) as a reduction to the Purchases account 
B) in contra-accounts to the Purchases account 
C) as operating expenses 
D) as miscellaneous expenses

Question 8

Which of the following accounts would most likely appear on the income statement of a merchandise company, but not on the income statement of a service company?

Accepted Answer

A) cost of goods sold 
B) selling expenses 
C) administrative expenses 
D) income tax expense 
A) cost of goods sold 
B) selling expenses 
C) administrative expenses 
D) income tax expense

Question 9

When a company using LIFO experiences a partial or complete liquidation of its older, lower-priced inventory, its gross margin will be ____________________ for the period.

Accepted Answer

The answer of When a company using LIFO experiences a...

Question 10

During periods of stable purchase prices, FIFO produces the highest ending inventory relative to the other inventory costing methods.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is false regarding the reason that inventory costs are recorded as expenses when sold rather than when incurred?

Accepted Answer

A) It gives the user's of the company's financial statements a clearer picture of profitability. 
B) It helps the company achieve a better matching of expenses with related revenues. 
C) It gives the company's accounting personnel more time to record inventory transactions. 
D) Inventory is an asset at the time it is acquired. 
A) It gives the user's of the company's financial statements a clearer picture of profitability. 
B) It helps the company achieve a better matching of expenses with related revenues. 
C) It gives the company's accounting personnel more time to record inventory transactions. 
D) Inventory is an asset at the time it is acquired.

Question 12

The following data are available for one of the products sold by Robey Company, which uses a perpetual inventory system.  
-Refer to the information provided for Robey Company. If the LIFO method is used, determine the following amounts:
A) Ending inventory on February 28th
B) Cost of Goods sold for the month of February

Accepted Answer

A)(4 × $2) + (6 × $3

Question 13

Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June.June
  
-Refer to the information provided for Klump Co. If the company uses the FIFO inventory costing method, cost of goods sold for the month of June is:

Accepted Answer

A) $2,520.00 
B) $2,538.00 
C) $2,540.00 
D) $2,550.00 
A) $2,520.00 
B) $2,538.00 
C) $2,540.00 
D) $2,550.00

Question 14

Sales discounts decrease the cost of inventory acquired.

Accepted Answer

A) True 
 B)False

Question 15

Satoor, Inc.Satoor, Inc., which uses a periodic inventory system, purchased merchandise from Taye Company on July 7 for $15,000. The credit terms were 1/10, n/30. The goods were shipped FOB shipping point on July 7. Satoor, Inc. received the merchandise on July 10 and paid the amount due on July 15.
-Refer to the information provided for Satoor, Inc. When the buyer records the payment on July 15th, its journal entry will include

Accepted Answer

A) a decrease to Purchases for $15,000. 
B) an increase to Inventory for $14,850. 
C) a decrease to Cash for $15,000. 
D) a decrease to Accounts Payable for $15,000. 
A) a decrease to Purchases for $15,000. 
B) an increase to Inventory for $14,850. 
C) a decrease to Cash for $15,000. 
D) a decrease to Accounts Payable for $15,000.

Question 16

During periods of declining purchase prices, LIFO produces the lowest amount of ending inventory relative to the other inventory costing methods.

Accepted Answer

A) True 
 B)False

Question 17

Xu, Inc. reported the following information for 2020 and 2019:   Determine the following amounts for Xu, Inc. for 2020:
A)Net cost of inventory purchases
B)Cost of goods available for sale
C)Cost of goods sold
D)Net sales
E)Gross profit ratio
F)Inventory turnover ratio
G)Average days to sell inventory

Accepted Answer

A)$500,000 purchases − $5,000 purchase d

Question 18

Satoor, Inc.Satoor, Inc., which uses a periodic inventory system, purchased merchandise from Taye Company on July 7 for $15,000. The credit terms were 1/10, n/30. The goods were shipped FOB shipping point on July 7. Satoor, Inc. received the merchandise on July 10 and paid the amount due on July 15.
-Refer to the information provided for Satoor, Inc. What effect does recording the purchase of merchandise on July 7 have on the buyer's accounting equation?

Accepted Answer

A) assets and liabilities increase 
B) liabilities increase and stockholders' equity decreases 
C) assets and stockholders' equity increase 
D) liabilities and stockholders' equity decrease 
A) assets and liabilities increase 
B) liabilities increase and stockholders' equity decreases 
C) assets and stockholders' equity increase 
D) liabilities and stockholders' equity decrease

Question 19

Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June.June
  
-Refer to the information provided for Klump Co. If the company uses the LIFO inventory costing method, ending inventory at June 30th is:

Accepted Answer

A) $1,823.25 
B) $1,811.75 
C) $1,810.00 
D) $1,806.25 
A) $1,823.25 
B) $1,811.75 
C) $1,810.00 
D) $1,806.25

Question 20

The ratio of a company's cost of goods sold to its average inventory is called its __________.

Accepted Answer

inventory

Match the terms with the descriptions provided. -Reduce the amount that is owed to the seller for payment within the discount period.

Presented below is a partially-completed income statement for Waddy Corp. for the year ended December 31. Determine the missing amounts for each letter.

Stallworth Corp. uses a periodic inventory system. The following information is available for the month of November: -Refer to the information provided for Stallworth Corp. If the company uses the FIFO inventory costing method, the amount assigned to the November 30th inventory would be

How are purchase returns and purchase discounts recorded by a company using the periodic inventory system?

Which of the following accounts would most likely appear on the income statement of a merchandise company, but not on the income statement of a service company?

When a company using LIFO experiences a partial or complete liquidation of its older, lower-priced inventory, its gross margin will be ____________________ for the period.

During periods of stable purchase prices, FIFO produces the highest ending inventory relative to the other inventory costing methods.

Which of the following statements is false regarding the reason that inventory costs are recorded as expenses when sold rather than when incurred?

Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June.June -Refer to the information provided for Klump Co. If the company uses the FIFO inventory costing method, cost of goods sold for the month of June is:

Sales discounts decrease the cost of inventory acquired.

During periods of declining purchase prices, LIFO produces the lowest amount of ending inventory relative to the other inventory costing methods.

Xu, Inc. reported the following information for 2020 and 2019: Determine the following amounts for Xu, Inc. for 2020: A)Net cost of inventory purchases B)Cost of goods available for sale C)Cost of goods sold D)Net sales E)Gross profit ratio F)Inventory turnover ratio G)Average days to sell inventory

Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June.June -Refer to the information provided for Klump Co. If the company uses the LIFO inventory costing method, ending inventory at June 30th is:

The ratio of a company's cost of goods sold to its average inventory is called its __________.

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

Exam 6: Cost Of Goods Sold and Inventory

Match the terms with the descriptions provided. -Reduce the amount that is owed to the seller for payment within the discount period.

Presented below is a partially-completed income statement for Waddy Corp. for the year ended December 31. Determine the missing amounts for each letter.

Stallworth Corp. uses a periodic inventory system. The following information is available for the month of November: -Refer to the information provided for Stallworth Corp. If the company uses the FIFO inventory costing method, the amount assigned to the November 30th inventory would be

How are purchase returns and purchase discounts recorded by a company using the periodic inventory system?

Which of the following accounts would most likely appear on the income statement of a merchandise company, but not on the income statement of a service company?

When a company using LIFO experiences a partial or complete liquidation of its older, lower-priced inventory, its gross margin will be ____________________ for the period.

During periods of stable purchase prices, FIFO produces the highest ending inventory relative to the other inventory costing methods.

Which of the following statements is false regarding the reason that inventory costs are recorded as expenses when sold rather than when incurred?

Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June.June -Refer to the information provided for Klump Co. If the company uses the FIFO inventory costing method, cost of goods sold for the month of June is:

Sales discounts decrease the cost of inventory acquired.

During periods of declining purchase prices, LIFO produces the lowest amount of ending inventory relative to the other inventory costing methods.

Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June.June -Refer to the information provided for Klump Co. If the company uses the LIFO inventory costing method, ending inventory at June 30th is:

The ratio of a company's cost of goods sold to its average inventory is called its __________.

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