Question 1

The recognition of cost of goods sold expense in the same period that sales revenue is recognized from the sale of merchandise is a good example of the:

Accepted Answer

A)  matching principle. 
B)  full disclosure principle. 
C)  revenue realization principle. 
D)  historical cost principle. 
A)  matching principle. 
B)  full disclosure principle. 
C)  revenue realization principle. 
D)  historical cost principle.

Question 2

The credit term of "n/30" means that the net amount of the invoice, less any returns or allowances, is due within 30 days of the date of the invoice.

Accepted Answer

A) True 
 B)False

Question 3

Match the terms with the descriptions related to merchandise sales and purchases.
-Relies on a count of inventory on the last day of the year to determine amount on hand

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 4

Which method assigns the same cost to all units whether sold or left in ending inventory?

Accepted Answer

A)  Specific identification 
B)  Weighted average cost 
C)  FIFO 
D)  LIFO 
A)  Specific identification 
B)  Weighted average cost 
C)  FIFO 
D)  LIFO

Question 5

Which one of the following accounts most likely would 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 6

Refer to the information about Cooking Corner.
How much is Cooking Corner's cost of goods sold assuming that Cooking Corner takes advantage of one-half of the cash discount?

Accepted Answer

$32,000 Beginning Inventory + $627,660 P

Question 7

At the year-end inventory count, if goods in transit are shipped FOB destination, they should be included in the inventory count of

Accepted Answer

A)  The seller 
B)  The buyer 
C)  Neither the buyer nor the seller 
A)  The seller 
B)  The buyer 
C)  Neither the buyer nor the seller

Question 8

Shipping terms of mean that the buyer pays shipping costs.

Accepted Answer

The answer of Shipping terms of mean that the buyer...

Question 9

When an inventory system updates the Inventory account at the time of each sale, this is known as:

Accepted Answer

A)  a periodic system. 
B)  a contra-purchase system. 
C)  a perpetual system. 
D)  an accrual system. 
A)  a periodic system. 
B)  a contra-purchase system. 
C)  a perpetual system. 
D)  an accrual system.

Question 10

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 11

Moving average is the name given to the use of an average cost method used with a periodic inventory system.

Accepted Answer

A) True 
 B)False

Question 12

When a weighted average cost assumption is applied with a perpetual system, it is sometimes called a __________________.

Accepted Answer

The answer of When a weighted average cost assumption is...

Question 13

The method results in the best approximation of replacement cost of goods sold on the income statement during periods of rising prices.

Accepted Answer

The answer of The method results in the best approximation...

Question 14

Givens Corp.
Givens Corp. is a merchandising company that uses the periodic inventory system. Selected account balances are listed below:
  
-Refer to the information for Givens Corp. Calculate net income.

Accepted Answer

A)  $289,000 
B)  $141,000 
C)  $131,000 
D)  $116,000 
A)  $289,000 
B)  $141,000 
C)  $131,000 
D)  $116,000

Question 15

All of the following statements are true except:

Accepted Answer

A)  Both U.S. GAAP and international financial reporting standards IFRS require the use of the lower-of-cost- or-market rule to value inventories. 
B)  U.S. GAAP defines market value as replacement cost. 
C)  IFRS uses net realizable value with no upper or lower limits imposed. 
D)  Write-downs of inventory can be reversed in later periods under U.S. GAAP. 
A)  Both U.S. GAAP and international financial reporting standards IFRS require the use of the lower-of-cost- or-market rule to value inventories. 
B)  U.S. GAAP defines market value as replacement cost. 
C)  IFRS uses net realizable value with no upper or lower limits imposed. 
D)  Write-downs of inventory can be reversed in later periods under U.S. GAAP.

Question 16

Eversoll Inc. uses the periodic inventory system.   How many units did Eversoll, Inc. sell during June?

Accepted Answer

A)  50 
B)  90 
C)  100 
D)  150 
A)  50 
B)  90 
C)  100 
D)  150

Question 17

Eversoll Inc. uses the periodic inventory system.   If Eversoll uses the LIFO inventory method, the cost of goods sold for June would be

Accepted Answer

A)  $1,354.00 
B)  $2,200.00 
C)  $2,272.50 
D)  $2,296.08 
A)  $1,354.00 
B)  $2,200.00 
C)  $2,272.50 
D)  $2,296.08

Question 18

The Ramien Store held inventory items at the end of 2014. Which items should Ramien include as part of its total inventory cost?

Accepted Answer

A)  Freight incurred in shipping goods to customers. 
B)  Annual income taxes paid for operations. 
C)  Cost of storing inventory before it is sold. 
D)  Cost of salaries of clerks that sell the inventory items. 
A)  Freight incurred in shipping goods to customers. 
B)  Annual income taxes paid for operations. 
C)  Cost of storing inventory before it is sold. 
D)  Cost of salaries of clerks that sell the inventory items.

Question 19

Eversoll Inc. uses the periodic inventory system.   If Eversoll uses the weighted average cost inventory method, the amount assigned to the June 30th inventory would be

Accepted Answer

A)  $1,359.90 
B)  $1,486.50 
C)  $1,549.00 
D)  $1,591.50 
A)  $1,359.90 
B)  $1,486.50 
C)  $1,549.00 
D)  $1,591.50

Question 20

If a customer returns merchandise which has already been paid for, the retailer may give either a cash refund or a credit on account.

Accepted Answer

A) True 
 B)False

The recognition of cost of goods sold expense in the same period that sales revenue is recognized from the sale of merchandise is a good example of the:

The credit term of "n/30" means that the net amount of the invoice, less any returns or allowances, is due within 30 days of the date of the invoice.

Match the terms with the descriptions related to merchandise sales and purchases. -Relies on a count of inventory on the last day of the year to determine amount on hand

Which method assigns the same cost to all units whether sold or left in ending inventory?

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

Refer to the information about Cooking Corner. How much is Cooking Corner's cost of goods sold assuming that Cooking Corner takes advantage of one-half of the cash discount?

At the year-end inventory count, if goods in transit are shipped FOB destination, they should be included in the inventory count of

Shipping terms of mean that the buyer pays shipping costs.

When an inventory system updates the Inventory account at the time of each sale, this is known as:

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

Moving average is the name given to the use of an average cost method used with a periodic inventory system.

When a weighted average cost assumption is applied with a perpetual system, it is sometimes called a __________________.

The method results in the best approximation of replacement cost of goods sold on the income statement during periods of rising prices.

Givens Corp. Givens Corp. is a merchandising company that uses the periodic inventory system. Selected account balances are listed below: -Refer to the information for Givens Corp. Calculate net income.

All of the following statements are true except:

Eversoll Inc. uses the periodic inventory system. How many units did Eversoll, Inc. sell during June?

Eversoll Inc. uses the periodic inventory system. If Eversoll uses the LIFO inventory method, the cost of goods sold for June would be

The Ramien Store held inventory items at the end of 2014. Which items should Ramien include as part of its total inventory cost?

Eversoll Inc. uses the periodic inventory system. If Eversoll uses the weighted average cost inventory method, the amount assigned to the June 30th inventory would be

If a customer returns merchandise which has already been paid for, the retailer may give either a cash refund or a credit on account.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

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Exam 5: Inventories and Cost of Goods Sold

The recognition of cost of goods sold expense in the same period that sales revenue is recognized from the sale of merchandise is a good example of the:

The credit term of "n/30" means that the net amount of the invoice, less any returns or allowances, is due within 30 days of the date of the invoice.

Match the terms with the descriptions related to merchandise sales and purchases. -Relies on a count of inventory on the last day of the year to determine amount on hand

Which method assigns the same cost to all units whether sold or left in ending inventory?

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

Refer to the information about Cooking Corner. How much is Cooking Corner's cost of goods sold assuming that Cooking Corner takes advantage of one-half of the cash discount?

At the year-end inventory count, if goods in transit are shipped FOB destination, they should be included in the inventory count of

Shipping terms of mean that the buyer pays shipping costs.

When an inventory system updates the Inventory account at the time of each sale, this is known as:

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

Moving average is the name given to the use of an average cost method used with a periodic inventory system.

When a weighted average cost assumption is applied with a perpetual system, it is sometimes called a __________________.

The method results in the best approximation of replacement cost of goods sold on the income statement during periods of rising prices.

Givens Corp. Givens Corp. is a merchandising company that uses the periodic inventory system. Selected account balances are listed below: -Refer to the information for Givens Corp. Calculate net income.

All of the following statements are true except:

Eversoll Inc. uses the periodic inventory system. How many units did Eversoll, Inc. sell during June?

Eversoll Inc. uses the periodic inventory system. If Eversoll uses the LIFO inventory method, the cost of goods sold for June would be

The Ramien Store held inventory items at the end of 2014. Which items should Ramien include as part of its total inventory cost?

Eversoll Inc. uses the periodic inventory system. If Eversoll uses the weighted average cost inventory method, the amount assigned to the June 30th inventory would be

If a customer returns merchandise which has already been paid for, the retailer may give either a cash refund or a credit on account.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

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