Question 1

The choice of an inventory cost flow assumption can have a dramatic impact on amounts in financial statements.

Accepted Answer

A) True 
 B)False

Question 2

The assignment of costs to cost of goods sold and inventory using (moving)weighted average usually gives different results depending on whether a perpetual or periodicsystem is used.

Accepted Answer

A) True 
 B)False

Question 3

If your inventory is destroyed by fire you can estimate the amount of inventorydestroyed if you know: beginning inventory, purchases, net sales, and gross profit ratio.

Accepted Answer

A) True 
 B)False

Question 4

A company made the following purchases during the year:   On December 31, there were 32 units in ending inventory. These 32 unitsconsisted of 3 from the January 10 shipment, 4 from the March 15 shipment, 5 from the April 25 shipment, 15 from the July 30 shipment, and 5 from theOctober 10 shipment. Using specific identification, calculate the cost of theending inventory.

Accepted Answer

The answer of A company made the following purchases during...

Question 5

The gross profit ratio measures how much of each dollar of net sales is gross profit.

Accepted Answer

A) True 
 B)False

Question 6

Interim statements:

Accepted Answer

A) Are necessary to achieve full disclosure about a business's operations. 
B) Are usually monthly or quarterly statements prepared in between the traditional, annual statements. 
C) Are required by CRA. 
D) Are required by CRA and are necessary to achieve full disclosure about a business's operations. 
E) All of these answers are correct. 
A) Are necessary to achieve full disclosure about a business's operations. 
B) Are usually monthly or quarterly statements prepared in between the traditional, annual statements. 
C) Are required by CRA. 
D) Are required by CRA and are necessary to achieve full disclosure about a business's operations. 
E) All of these answers are correct.

Question 7

Understatement of ending inventory causes:

Accepted Answer

A) Cost of goods sold to be understated and net income to be overstated. 
B) Cost of goods sold to be understated and net income to be understated. 
C) Cost of goods sold to be overstated and net income to be understated. 
D) Cost of goods sold to be overstated and net income to be overstated. 
E) Cost of goods sold to be overstated and net income to be accurate. 
A) Cost of goods sold to be understated and net income to be overstated. 
B) Cost of goods sold to be understated and net income to be understated. 
C) Cost of goods sold to be overstated and net income to be understated. 
D) Cost of goods sold to be overstated and net income to be overstated. 
E) Cost of goods sold to be overstated and net income to be accurate.

Question 8

What are the effects of inventory methods on financial and tax reporting?

Accepted Answer

The specific identification method exact

The choice of an inventory cost flow assumption can have a dramatic impact on amounts in financial statements.

The assignment of costs to cost of goods sold and inventory using (moving)weighted average usually gives different results depending on whether a perpetual or periodicsystem is used.

If your inventory is destroyed by fire you can estimate the amount of inventorydestroyed if you know: beginning inventory, purchases, net sales, and gross profit ratio.

The gross profit ratio measures how much of each dollar of net sales is gross profit.

Interim statements:

Understatement of ending inventory causes:

What are the effects of inventory methods on financial and tax reporting?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Internal Control and Cash

Receivables

Appendix

Filters

Exam 6: Inventory Costing and Valuation

The choice of an inventory cost flow assumption can have a dramatic impact on amounts in financial statements.

The assignment of costs to cost of goods sold and inventory using (moving)weighted average usually gives different results depending on whether a perpetual or periodicsystem is used.

If your inventory is destroyed by fire you can estimate the amount of inventorydestroyed if you know: beginning inventory, purchases, net sales, and gross profit ratio.

The gross profit ratio measures how much of each dollar of net sales is gross profit.

Interim statements:

Understatement of ending inventory causes:

What are the effects of inventory methods on financial and tax reporting?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Internal Control and Cash

Receivables

Appendix

Filters