Exam 6: Cost of Goods Sold and Inventory

Shipping terms of ____________________ mean that the buyer pays shipping costs.

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; profits are higher under this method.

Under the FIFO method of inventory costing, the units in the ending inventory represent the oldest purchase(s).

Which inventory cost flow method assigns the cost of the most recent items purchased to cost of goods sold?

Which of the following statements is true regarding just-in-time inventory management?

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 -Collected cash from a customer for payment within the discount period.

Match the terms with the descriptions provided. a.Consignment f.Purchase allowance b.Discount period g.Purchase discounts c.Inventory h.Purchase returns d.LIFO Reserve i.Purchases e.Lower of cost or market rule -The amount that the inventory would increase or decrease if the company had used FIFO instead of LIFO.

Match the terms with the descriptions provided. a.Consignment f.Purchase allowance b.Discount period g.Purchase discounts c.Inventory h.Purchase returns d.LIFO Reserve i.Purchases e.Lower of cost or market rule -Represents a departure from reporting assets at their historical cost.

When the market value of inventory items has declined below their cost, which method would be the most appropriate in complying with GAAP?

-Refer to the information provided for Paschal Exports. If the LIFO method of inventory costing is used, determine the following amounts: A)Cost of goods sold for the units sold on July 10th? B)Ending inventory on July 31st?

Qualls Department Store counted some of its inventory items twice. As a result, its operating expenses will be

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 FIFO inventory costing method, the amount assigned to the November 30th inventory would be

Which of the following statements is true?

Yancey Company The following information is available for Yancey Company, a retail store, for the year 2013. The company uses a periodic inventory system. Beginning inventory was $32,000. During the year, Yancey Company purchased goods totaling $634,000 on account with terms of 2/10, n/30, FOB shipping point. Yancey Company paid $1,000 in total freight charges directly to the freight company. At the end of the year, inventory on hand totaled $45,000. Net sales reported on the income statement for the year totaled $1,300,000. -Refer to the information provided for Yancey Company. How much is cost of goods available for sale for 2013 assuming that Yancey Company take advantage of one-half of the cash discounts?

Cost of goods sold represents an outflow of a resource, inventory, which is caused by the sale of products.

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 -The buyer must pay the shipping costs.

Match the terms with the descriptions provided. a.Average days to sell inventory d.Inventory turnover ratio b.Gross margin e.Freight-in c.Gross profit ratio f.Freight-out -The difference between a company's net sales and its cost of goods sold.

Match the terms with the descriptions provided. a.Consignment f.Purchase allowance b.Discount period g.Purchase discounts c.Inventory h.Purchase returns d.LIFO Reserve i.Purchases e.Lower of cost or market rule -In the periodic inventory system, the account used to record the cost of merchandise acquired for resale.

In order to determine inventory for its balance sheet, a company must count the inventory at the end of its accounting period according to

Selected account balances are listed below: -Refer to the information provided for Dollar Town. Calculate the net cost of goods purchased.