Exam 7: Inventory and Cost of Goods Sold

Saguaro Company updates its inventory perpetually.Its beginning inventory is $70,000,goods purchased during the period cost $240,000,and the cost of goods sold for the period is $280,000.What is the amount of the ending inventory?

The LIFO inventory cost flow assumes that the cost of the newest goods purchased are:

A $15,000 understatement of the current year's ending inventory was discovered after the financial statements for the year were prepared.How would that inventory error impact the current year's financial statements?

In a period of falling prices,the inventory costing method that assigns a value to inventory that approximates current cost is:

Windrose,Inc.uses a periodic inventory system and its inventory records contain the following information: The company sold 2,000 units during June.There were no additional purchases or sales during the remainder of the year.The company had 1,000 units were in its ending inventory at the end of the year. If Windrose uses the FIFO costing method,what is the cost of its ending inventory?

Goods on consignment are goods shipped by the owner to another company that holds the goods and sells them on behalf of the owner.

When the market value of inventory drops below the cost recorded in the financial records,applying the lower of cost or market/net realizable value (LCM/NRV)rule causes:

Which of the following would cause the greatest increase in a company's inventory turnover ratio?

Ending inventory is incorrectly calculated in the current year.It is accurately calculated at the end of the next year.The error in the ending inventory in the current year:

Assume a periodic inventory system is used.The LIFO inventory costing method assumes that the cost of the units most recently purchased is the:

Which of the following is not associated with a high inventory turnover ratio?

When costs to purchase inventory are decreasing,using LIFO leads to reporting ________ cost of goods sold and ________ net income than FIFO.

Which of the following statements about inventory turnover analysis is not correct?

FIFO,an inventory costing method,actually describes how to calculate the:

Match the term to the appropriate definition.There are more definitions than terms. -Raw Materials Inventory

The Xu Corporation uses a periodic inventory system.The company has a beginning inventory of 300 units at $5 each on January 1.Xu purchases 500 units at $4 each in February and 200 units at $6 each in March.There were no additional purchases or sales during the remainder of the year. Xu sells 300 units during the quarter.If Xu uses the LIFO method,what is its cost of goods sold?

The inventory turnover ratio is calculated as:

Which of the following is not one of the primary goals of inventory management?

Carrying insufficient quantities of inventory on hand:

Match the term to the appropriate definition.There are more definitions than terms. -Consignment Inventory