Question 1

Which of the following inventory costing methods yields the highest ending inventory when costs are rising during the accounting period?

Accepted Answer

A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out 
A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out

Question 2

Berring Sales uses FIFO.The partially completed inventory record for January appears below.   On January 14,the company sold 10 units.On January 29,the company sold 50 units.
-Complete the inventory record through the January 14 sale and calculate the inventory balance after the sale on January 14.(Please round to the nearest whole dollar.)

Accepted Answer

A)  $230 
B)  $228 
C)  $330 
D)  $216 
A)  $230 
B)  $228 
C)  $330 
D)  $216

Question 3

Which of the following inventory costing methods yields the highest gross profit when costs are rising during the accounting period?

Accepted Answer

A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out 
A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out

Question 4

Which of the following requires that financial statements should report the LEAST favorable figures?

Accepted Answer

A)  Accounting conservatism 
B)  Materiality concept 
C)  Disclosure principle 
D)  Consistency principle 
A)  Accounting conservatism 
B)  Materiality concept 
C)  Disclosure principle 
D)  Consistency principle

Question 5

The following data is available: $$\begin{array} { | r | r | } 
\hline \text { Net sales, first month } & \$ 13,000 \
\hline \text { Normal gross profit } & 45 \% \
\hline \text { Beginning inventory } & 8,000 \
\hline \text { Net purchases } & 7,000 \
\hline
\end{array}$$
-Using the gross profit method,the Cost of goods sold would be:

Accepted Answer

A)  $15,000. 
B)  $7,150. 
C)  $7,850. 
D)  $5,850. 
A)  $15,000. 
B)  $7,150. 
C)  $7,850. 
D)  $5,850.

Question 6

Martin Sales had a Beginning inventory balance of $120 made up of 10 units purchased for $12.00 per unit.Early in the month,they purchased 16 units at $10.00 per unit.Later that month,they sold 15 units.Martin uses a perpetual inventory system,and applies LIFO.
-How much is Cost of goods sold for the month?

Accepted Answer

A)  $180 
B)  $170 
C)  $150 
D)  $110 
A)  $180 
B)  $170 
C)  $150 
D)  $110

Question 7

One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO.Current replacement cost is $8.00.How would the Cost of goods sold be affected by the adjusting entry needed under lower-of-cost-or-market?

Accepted Answer

A)  Cost of goods sold would not be affected. 
B)  Cost of goods sold would go down by $80. 
C)  Cost of goods sold would go up by $200. 
D)  Cost of goods sold would go down by $200. 
A)  Cost of goods sold would not be affected. 
B)  Cost of goods sold would go down by $80. 
C)  Cost of goods sold would go up by $200. 
D)  Cost of goods sold would go down by $200.

Question 8

Berring Sales uses FIFO.The partially completed inventory record for January appears below.   On January 14,the company sold 10 units.On January 29,the company sold 50 units.
-Complete the inventory record through the January 14 sale and calculate the Cost of goods sold for the sale on January 14.(Please round to the nearest whole dollar.)

Accepted Answer

A)  $40 
B)  $46 
C)  $38 
D)  $43 
A)  $40 
B)  $46 
C)  $38 
D)  $43

Question 9

Which inventory valuation model deals with unique or high dollar items?

Accepted Answer

A)  First-In, First-Out 
B)  Last-In, First-Out 
C)  Average-cost 
D)  Specific-unit-cost 
A)  First-In, First-Out 
B)  Last-In, First-Out 
C)  Average-cost 
D)  Specific-unit-cost

Question 10

One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO.Current replacement cost is $8.00.How would the Gross profit be affected by the adjusting entry needed under lower-of-cost-or-market?

Accepted Answer

A)  Gross profit would not be affected. 
B)  Gross profit would go down by $80. 
C)  Gross profit would go up by $200. 
D)  Gross profit would go down by $200. 
A)  Gross profit would not be affected. 
B)  Gross profit would go down by $80. 
C)  Gross profit would go up by $200. 
D)  Gross profit would go down by $200.

Question 11

Henderson Sales purchased $500 of inventory on account.Please provide the journal entry.
 $$\begin{array} { | l | r | r | } 
\hline \quad\quad\quad&\quad&\quad \
\hline \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 12

A company discovers that its Cost of goods sold is understated by an insignificant amount.They do not need to correct the error because of the materiality concept.

Accepted Answer

A) True 
 B)False

Question 13

A new average cost is calculated after each purchase when a business is using which of the following methods?

Accepted Answer

A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out 
A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out

Question 14

When a company uses LIFO,the Cost of goods sold correlates to the most recently purchased goods,and the ending inventory correlates to the oldest goods in stock.

Accepted Answer

A) True 
 B)False

Question 15

Under Last-In,First-Out,the Cost of goods sold is based on the oldest purchases.

Accepted Answer

A) True 
 B)False

Question 16

Ending inventory equals the cost of goods available for sale less beginning inventory.

Accepted Answer

A) True 
 B)False

Question 17

Under which of the following inventory costing methods is ending inventory based on the cost of the most recent purchases?

Accepted Answer

A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out 
A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out

Question 18

Ending inventory for the current year is overstated by $20,000.What effect will this error have on the following year's Net income?

Accepted Answer

A)  The inventory overstatement will not affect Net income. 
B)  Net income will be overstated by $20,000. 
C)  Net income will be understated by $20,000. 
D)  Net income will be understated by $40,000. 
A)  The inventory overstatement will not affect Net income. 
B)  Net income will be overstated by $20,000. 
C)  Net income will be understated by $20,000. 
D)  Net income will be understated by $40,000.

Question 19

Which of the following inventory costing methods yields the lowest cost of goods sold when costs are rising during the accounting period?

Accepted Answer

A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out 
A)  Specific-unit-cost 
B)  Average-cost 
C)  Last-In, First-Out 
D)  First-In, First-Out

Question 20

Samson Company had the following balances and transactions during 2012. $$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 10 \text { units at } \$ 70 \
\hline \text { March } 10 & \text { Sold } 8 \text { units } \
\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \
\hline \text { October 30 } & \text { Sold } 15 \text { units } \
\hline
\end{array}$$ What would the company's Inventory amount be on the December 31,2012 balance sheet if the periodic FIFO costing method is used? (Answers are rounded to the nearest dollar.)

Accepted Answer

A)  $554 
B)  $490 
C)  $537 
D)  $560 
A)  $554 
B)  $490 
C)  $537 
D)  $560

Which of the following inventory costing methods yields the highest ending inventory when costs are rising during the accounting period?

Which of the following inventory costing methods yields the highest gross profit when costs are rising during the accounting period?

Which of the following requires that financial statements should report the LEAST favorable figures?

The following data is available: Net sales, first month \ 13,000 Normal gross profit 45\% Beginning inventory 8,000 Net purchases 7,000 -Using the gross profit method,the Cost of goods sold would be:

One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO.Current replacement cost is $8.00.How would the Cost of goods sold be affected by the adjusting entry needed under lower-of-cost-or-market?

Which inventory valuation model deals with unique or high dollar items?

One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO.Current replacement cost is $8.00.How would the Gross profit be affected by the adjusting entry needed under lower-of-cost-or-market?

Henderson Sales purchased $500 of inventory on account.Please provide the journal entry.

A company discovers that its Cost of goods sold is understated by an insignificant amount.They do not need to correct the error because of the materiality concept.

A new average cost is calculated after each purchase when a business is using which of the following methods?

When a company uses LIFO,the Cost of goods sold correlates to the most recently purchased goods,and the ending inventory correlates to the oldest goods in stock.

Under Last-In,First-Out,the Cost of goods sold is based on the oldest purchases.

Ending inventory equals the cost of goods available for sale less beginning inventory.

Under which of the following inventory costing methods is ending inventory based on the cost of the most recent purchases?

Ending inventory for the current year is overstated by $20,000.What effect will this error have on the following year's Net income?

Which of the following inventory costing methods yields the lowest cost of goods sold when costs are rising during the accounting period?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 6: Merchandising Inventory

Which of the following inventory costing methods yields the highest ending inventory when costs are rising during the accounting period?

Which of the following inventory costing methods yields the highest gross profit when costs are rising during the accounting period?

Which of the following requires that financial statements should report the LEAST favorable figures?

The following data is available: Net sales, first month \ 13,000 Normal gross profit 45\% Beginning inventory 8,000 Net purchases 7,000 -Using the gross profit method,the Cost of goods sold would be:

One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO.Current replacement cost is $8.00.How would the Cost of goods sold be affected by the adjusting entry needed under lower-of-cost-or-market?

Which inventory valuation model deals with unique or high dollar items?

One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO.Current replacement cost is $8.00.How would the Gross profit be affected by the adjusting entry needed under lower-of-cost-or-market?

Henderson Sales purchased $500 of inventory on account.Please provide the journal entry.

A company discovers that its Cost of goods sold is understated by an insignificant amount.They do not need to correct the error because of the materiality concept.

A new average cost is calculated after each purchase when a business is using which of the following methods?

When a company uses LIFO,the Cost of goods sold correlates to the most recently purchased goods,and the ending inventory correlates to the oldest goods in stock.

Under Last-In,First-Out,the Cost of goods sold is based on the oldest purchases.

Ending inventory equals the cost of goods available for sale less beginning inventory.

Under which of the following inventory costing methods is ending inventory based on the cost of the most recent purchases?

Ending inventory for the current year is overstated by $20,000.What effect will this error have on the following year's Net income?

Which of the following inventory costing methods yields the lowest cost of goods sold when costs are rising during the accounting period?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters