Question 1

The weighted average cost per unit must be continually updated under the perpetual inventory system.

Accepted Answer

A) True 
 B)False

Question 2

Accountants define the market value of inventory as its ____________________.

Accepted Answer

The answer of Accountants define the market value of inventory...

Question 3

Match the terms with the descriptions related to merchandise sales and purchases.
a.Transportation-in
e.Cost of goods available for sale
b.Perpetual inventory system
f.Periodic inventory system
c.Net purchases
g.FOB shipping point
d.FOB destination
h.Delivery expense
-Requires updating of the inventory account at the time of each purchase and each sale.

Accepted Answer

The answer of Match the terms with the descriptions related...

Question 4

A departure from the cost basis of accounting may be necessary when the ____________________ of the inventory is less than its cost to the company.

Accepted Answer

market val

Question 5

Items should be included as part of the company's inventory if they are

Accepted Answer

A) purchased from a creditor, although not paid for by year end. 
B) held in anticipation of an increase in market value. 
C) determined to be part of cost of goods sold. 
D) sold during the period. 
A) purchased from a creditor, although not paid for by year end. 
B) held in anticipation of an increase in market value. 
C) determined to be part of cost of goods sold. 
D) sold during the period.

Question 6

When inventories are written down due to the application of the lower of cost or market (LCM)rule, which of the following is usually increased?

Accepted Answer

A) cost of goods sold 
B) Inventories 
C) operating expenses 
D) accumulated depreciation--inventory 
A) cost of goods sold 
B) Inventories 
C) operating expenses 
D) accumulated depreciation--inventory

Question 7

Eli Company
Eli Company sells novelty items and offers terms of 1/10, n/30 to credit customers. One customer, Faulkner, Inc., purchased 100 Sweet-16 party decor packs with a list price of $20 each on March 5, 2013.
-Refer to the information provided for Eli Company. If the customer pays the amount of the invoice for its purchase on March 14, 2013, how much cash will Eli Company receive?

Accepted Answer

A) $1,400 
B) $1,800 
C) $1,980 
D) $2,000 
A) $1,400 
B) $1,800 
C) $1,980 
D) $2,000

Question 8

Eli Company
Eli Company sells novelty items and offers terms of 1/10, n/30 to credit customers. One customer, Faulkner, Inc., purchased 100 Sweet-16 party decor packs with a list price of $20 each on March 5, 2013.
-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 2013 income statement?

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 9

Deeter Company, which sells auto parts, uses a perpetual inventory system. Identify the effects on the accounting equation. (Choices may be used more than once.)
a.Increase in assets and liabilities
b.Decrease in assets and liabilities
c.Increase in assets and stockholders' equity
d.Decrease in assets and stockholders' equity
e.Increase in liabilities and decrease in stockholders' equity
f.Decrease in liabilities and increase in stockholders' equity
-Gave a customer a cash refund.

Accepted Answer

The answer of Deeter Company, which sells auto parts, uses...

Question 10

MATCHING
Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers.
a. merchandise inventory 
d. finished goods
b. raw materials 
e. cost of goods sold
c. work-in-process
-Costs to purchase goods ready to sell.

Accepted Answer

The answer of MATCHING
Match the inventory-related accounts to costs that...

Question 11

Shipping terms of FOB Destination means that the shipping costs are paid by the ______.

Accepted Answer

The answer of Shipping terms of FOB Destination means that...

Question 12

-Refer to the information provided for Robey Company. If the Moving Average Cost method is used, determine the following amounts:
A)Cost of Goods sold for the month of February?
B)Ending inventory on February 28th?

Accepted Answer

The answer of  
-Refer to the information provided for...

Question 13

Identify which inventory costing method achieves the effect listed in the following items. (Choices may be used more than once.)
a.FIFO method
c.Average cost method
b.LIFO method
d.Specific identification method
-Prices are rising; cost of goods sold is lower with this method.

Accepted Answer

The answer of Identify which inventory costing method achieves the...

Question 14

Noland, Inc. uses the LIFO method of inventory costing and is facing the possibility of a LIFO liquidation for the current year. Merchandise purchase prices have increased since the LIFO method was adopted. If the company does not purchase additional merchandise before year-end, which one of the following effects will occur as a result of a LIFO liquidation?

Accepted Answer

A) Reported earnings for the current year will be higher. 
B) Income taxes for the current year will be lower. 
C) Cost of goods sold for the current year will be higher. 
D) Gross margin for the current year will be lower. 
A) Reported earnings for the current year will be higher. 
B) Income taxes for the current year will be lower. 
C) Cost of goods sold for the current year will be higher. 
D) Gross margin for the current year will be lower.

Question 15

-Refer to the information provided for Lemke Corp. How much is the cost of goods sold for the units sold on April 15th?

Accepted Answer

A) $245 
B) $255 
C) $260 
D) $270 
A) $245 
B) $255 
C) $260 
D) $270

Question 16

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) the shipping company. 
D) neither the buyer nor the seller. 
A) the seller. 
B) the buyer. 
C) the shipping company. 
D) neither the buyer nor the seller.

Question 17

A LIFO inventory liquidation occurs when a company that uses the LIFO inventory costing method

Accepted Answer

A) buys more merchandise during the accounting period than it sells. 
B) cannot determine the ending inventory because it has been destroyed or stolen. 
C) changes its inventory method from FIFO to LIFO. 
D) sells more merchandise during the accounting period than it purchased. 
A) buys more merchandise during the accounting period than it sells. 
B) cannot determine the ending inventory because it has been destroyed or stolen. 
C) changes its inventory method from FIFO to LIFO. 
D) sells more merchandise during the accounting period than it purchased.

Question 18

Satoor, Inc.
Satoor, Inc., which uses a periodic inventory system, purchased merchandise from Taye Company on July 7, 2013, for $15,000. The credit terms were 1/10, n/30. The goods were shipped FOB shipping point on July 7, 2013. Satoor, Inc. received the merchandise on July 10 and paid the amount due on July 15.
-Refer to the information provided for Stallworth Corp. If the company uses the weighted average cost method, the cost assigned to each unit in ending inventory would be

Accepted Answer

A) $15.00. 
B) $15.10. 
C) $15.11. 
D) $15.20. 
A) $15.00. 
B) $15.10. 
C) $15.11. 
D) $15.20.

Question 19

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 20

If ending inventory is overstated, then net income is overstated as well.

Accepted Answer

A) True 
 B)False

The weighted average cost per unit must be continually updated under the perpetual inventory system.

Accountants define the market value of inventory as its ____________________.

A departure from the cost basis of accounting may be necessary when the ____________________ of the inventory is less than its cost to the company.

Items should be included as part of the company's inventory if they are

When inventories are written down due to the application of the lower of cost or market (LCM)rule, which of the following is usually increased?

MATCHING Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers. a. merchandise inventory d. finished goods b. raw materials e. cost of goods sold c. work-in-process -Costs to purchase goods ready to sell.

Shipping terms of FOB Destination means that the shipping costs are paid by the ______.

-Refer to the information provided for Robey Company. If the Moving Average Cost method is used, determine the following amounts: A)Cost of Goods sold for the month of February? B)Ending inventory on February 28th?

Identify which inventory costing method achieves the effect listed in the following items. (Choices may be used more than once.) a.FIFO method c.Average cost method b.LIFO method d.Specific identification method -Prices are rising; cost of goods sold is lower with this method.

-Refer to the information provided for Lemke Corp. How much is the cost of goods sold for the units sold on April 15th?

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

A LIFO inventory liquidation occurs when a company that uses the LIFO inventory costing method

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

If ending inventory is overstated, then net income is overstated as well.

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 Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 6: Cost of Goods Sold and Inventory

The weighted average cost per unit must be continually updated under the perpetual inventory system.

Accountants define the market value of inventory as its ____________________.

A departure from the cost basis of accounting may be necessary when the ____________________ of the inventory is less than its cost to the company.

Items should be included as part of the company's inventory if they are

When inventories are written down due to the application of the lower of cost or market (LCM)rule, which of the following is usually increased?

MATCHING Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers. a. merchandise inventory d. finished goods b. raw materials e. cost of goods sold c. work-in-process -Costs to purchase goods ready to sell.

Shipping terms of FOB Destination means that the shipping costs are paid by the ______.

-Refer to the information provided for Robey Company. If the Moving Average Cost method is used, determine the following amounts: A)Cost of Goods sold for the month of February? B)Ending inventory on February 28th?

Identify which inventory costing method achieves the effect listed in the following items. (Choices may be used more than once.) a.FIFO method c.Average cost method b.LIFO method d.Specific identification method -Prices are rising; cost of goods sold is lower with this method.

-Refer to the information provided for Lemke Corp. How much is the cost of goods sold for the units sold on April 15th?

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

A LIFO inventory liquidation occurs when a company that uses the LIFO inventory costing method

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

If ending inventory is overstated, then net income is overstated as well.

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 Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters