Question 1

The specific identification method of inventory costing

Accepted Answer

A) eliminates all opportunity for profit manipulation. 
B) matches the flow of recorded costs with the physical flow of goods. 
C) can be used only with a perpetual inventory system. 
D) is a violation of generally accepted accounting principles. 
A) eliminates all opportunity for profit manipulation. 
B) matches the flow of recorded costs with the physical flow of goods. 
C) can be used only with a perpetual inventory system. 
D) is a violation of generally accepted accounting principles. B

Question 2

The following information is available from Carron Company's 2014 accounting records:
 
Carron's 2014 cost of goods sold is

Accepted Answer

A) $465,000. 
B) $475,000. 
C) $505,000. 
D) $585,000. 
A) $465,000. 
B) $475,000. 
C) $505,000. 
D) $585,000. A

Question 3

A company sells four products: I, II, III, and IV. The company values all inventories using the lower-of-cost-or-market procedure. The company has consistently experienced a profit margin of 20 percent of sales and expects this rate to hold for the future. Additional information, shown below, is available for the most recent year as of December 31.
  
-See information regarding the four products above.Using the lower-of-cost-or-market procedure,what is the reported inventory value at December 31 for one unit of Product IV?

Accepted Answer

A) $60 
B) $80 
C) $90 
D) $70 
A) $60 
B) $80 
C) $90 
D) $70 D

Question 4

Selected information from the 2011 and 2010 financial statements of Bin Company is presented below:
 
Bin Company's merchandise inventory turnover for 2014 is

Accepted Answer

A) 3.43 
B) 5.68 
C) 6.79 
D) 6.63 
A) 3.43 
B) 5.68 
C) 6.79 
D) 6.63

Question 5

Stellar Inc.carries Product A in inventory on December 31 at its unit cost of $22.50.Because of a sharp decline in demand for the product,the selling price is reduced to $24.00 per unit.Stellar's normal profit margin on Product A is $4.80,disposal costs are $3.00 per unit,and the replacement cost is $15.90.Under the rule of lower of cost or market,Stellar's December 31 inventory of Product A should be valued at a unit cost of

Accepted Answer

A) $15.90. 
B) $16.20. 
C) $21.00. 
D) $22.50. 
A) $15.90. 
B) $16.20. 
C) $21.00. 
D) $22.50.

Question 6

A company sells four products: I, II, III, and IV. The company values all inventories using the lower-of-cost-or-market procedure. The company has consistently experienced a profit margin of 20 percent of sales and expects this rate to hold for the future. Additional information, shown below, is available for the most recent year as of December 31.
  
-See information regarding the four products above.Using the lower-of-cost-or-market procedure,what is the reported inventory value at December 31 for one unit of Product III?

Accepted Answer

A) $50 
B) $60 
C) $70 
D) $80 
A) $50 
B) $60 
C) $70 
D) $80

Question 7

The following data are available for the P.J.Berry Company
   
The company has experienced a temporary LIFO liquidation by not maintaining the base year inventory of 30,000 units.The company uses a perpetual inventory system.
Prepare the entries to account for the temporary liquidation and the replacement of the liquidated units assuming that 9,000 units will be replaced at $1.60 per unit

Accepted Answer

The answer of The following data are available for the...

Question 8

The following data relate to the records of Mandalay Corp.for the month of September:
   
Using these data,estimate the cost of ending inventory for each situation below:
(1)Markup is 50 percent on cost.
(2)Markup is 60 percent on sales.
(3)Markup is 25 percent on cost.
(4)Markup is 40 percent on sales.

Accepted Answer

(1)$160,000/1.50 = $106,667
$200,000 - $

Question 9

The LIFO inventory cost flow method may be applied to which of the following inventory systems?

Accepted Answer

The answer of The LIFO inventory cost flow method may...

Question 10

If a company experiences a liquidation of a LIFO inventory layer in the second quarter that is expected to be restored by the end of the annual financial reporting period,the company should

Accepted Answer

A) treat the layer as if it were liquidated and include in cost of goods sold the expected replacement cost of the inventory sold. 
B) deplete the LIFO layer as if the interim period were an annual period. 
C) change to an alternative inventory cost method, such as FIFO, so that the problem of LIFO liquidation is not encountered. 
D) delay the recognition of both revenue and cost of goods sold on the inventory involved until a final determination of the LIFO inventory can be made at the end of the annual period. 
A) treat the layer as if it were liquidated and include in cost of goods sold the expected replacement cost of the inventory sold. 
B) deplete the LIFO layer as if the interim period were an annual period. 
C) change to an alternative inventory cost method, such as FIFO, so that the problem of LIFO liquidation is not encountered. 
D) delay the recognition of both revenue and cost of goods sold on the inventory involved until a final determination of the LIFO inventory can be made at the end of the annual period.

Question 11

Elan Company's Accounts Payable balance at December 31,2014,was $1,800,000 before considering the following transactions:
•Goods were in transit from a vendor to Elan on December 31,2014.The invoice price was $100,000,and the goods were shipped FOB shipping point on December 29,2014.The goods were received on January 4,2015.
•Goods shipped to Elan FOB shipping point on December 20,2014,from a vendor were lost in transit.The invoice price was $50,000.On January 5,2015,Elan filed a $50,000 claim against the common carrier.
In its December 31,2011,balance sheet,Elan should report Accounts Payable of

Accepted Answer

A) $1,950,000. 
B) $1,900,000. 
C) $1,850,000. 
D) $1,800,000. 
A) $1,950,000. 
B) $1,900,000. 
C) $1,850,000. 
D) $1,800,000.

Question 12

In a period of rising prices,the inventory cost allocation method that tends to result in the lowest reported net income is

Accepted Answer

A) LIFO. 
B) FIFO. 
C) moving average. 
D) weighted average. 
A) LIFO. 
B) FIFO. 
C) moving average. 
D) weighted average.

Question 13

Marie's Sporting Goods had the following inventory records for one line of skis for the month of January:
 
Assuming the periodic LIFO inventory method is used,what is the cost of Marie's ending inventory?

Accepted Answer

A) $4,124 
B) $4,268 
C) $4,376 
D) $4,100 
A) $4,124 
B) $4,268 
C) $4,376 
D) $4,100

Question 14

Alana's Clothing Store sells jeans. During January 2014, its inventory records for one brand of designer jeans were as follows:
  
-See information for Alana's Clothing Store above.Using this information,the cost of goods sold using the average cost method is

Accepted Answer

A) $378. 
B) $358. 
C) $265. 
D) $236. 
A) $378. 
B) $358. 
C) $265. 
D) $236.

Question 15

On June 17,it was discovered that a material amount of inventory had been stolen.A physical count discloses that $55,000 of merchandise was on hand as of June 17.The following additional data is available from the accounting records:
   
Records indicate that the company's gross profit has averaged 40 percent of selling prices.
Required:
Estimate the amount of loss due to theft.

Accepted Answer

The answer of On June 17,it was discovered that a...

Question 16

Goods on consignment should be included in the inventory of

Accepted Answer

A) the consignor but not the consignee. 
B) the consignee but not the consignor. 
C) both the consignor and the consignee. 
D) neither the consignor nor the consignee. 
A) the consignor but not the consignee. 
B) the consignee but not the consignor. 
C) both the consignor and the consignee. 
D) neither the consignor nor the consignee.

Question 17

Which inventory pricing method best approximates specific identification in most manufacturing situations?

Accepted Answer

A) Activity-based costing 
B) FIFO 
C) Average cost 
D) LIFO 
A) Activity-based costing 
B) FIFO 
C) Average cost 
D) LIFO

Question 18

Which of the following is NOT true of the perpetual inventory method?

Accepted Answer

A) Purchases are recorded as debits to the inventory account. 
B) The entry to record a sale includes a debit to Cost of Goods Sold and a credit to Inventory. 
C) After a physical inventory count, Inventory is credited for any missing inventory. 
D) Purchase returns are recorded by debiting Accounts Payable and crediting Purchase Returns and Allowances. 
A) Purchases are recorded as debits to the inventory account. 
B) The entry to record a sale includes a debit to Cost of Goods Sold and a credit to Inventory. 
C) After a physical inventory count, Inventory is credited for any missing inventory. 
D) Purchase returns are recorded by debiting Accounts Payable and crediting Purchase Returns and Allowances.

Question 19

Paper Depot is a wholesaler of office supplies. The activity for Model III calculators during August is shown below:
  
-See information for Paper Depot above.If Paper Depot uses a LIFO periodic inventory system,the ending inventory of Model III calculators at August 31 is reported as

Accepted Answer

A) $146,400. 
B) $150,080. 
C) $150,160. 
D) $152,960. 
A) $146,400. 
B) $150,080. 
C) $150,160. 
D) $152,960.

Question 20

When using the periodic inventory method,which of the following generally would NOT be separately accounted for in the computation of cost of goods sold?

Accepted Answer

A) Trade discounts applicable to purchases during the period 
B) Cash (purchase) discounts taken during the period 
C) Purchase returns and allowances of merchandise during the period 
D) Cost of transportation-in for merchandise purchases during the period 
A) Trade discounts applicable to purchases during the period 
B) Cash (purchase) discounts taken during the period 
C) Purchase returns and allowances of merchandise during the period 
D) Cost of transportation-in for merchandise purchases during the period

The specific identification method of inventory costing

The following information is available from Carron Company's 2014 accounting records: Carron's 2014 cost of goods sold is

Selected information from the 2011 and 2010 financial statements of Bin Company is presented below: Bin Company's merchandise inventory turnover for 2014 is

The following data relate to the records of Mandalay Corp.for the month of September: Using these data,estimate the cost of ending inventory for each situation below: (1)Markup is 50 percent on cost. (2)Markup is 60 percent on sales. (3)Markup is 25 percent on cost. (4)Markup is 40 percent on sales.

The LIFO inventory cost flow method may be applied to which of the following inventory systems?

If a company experiences a liquidation of a LIFO inventory layer in the second quarter that is expected to be restored by the end of the annual financial reporting period,the company should

In a period of rising prices,the inventory cost allocation method that tends to result in the lowest reported net income is

Marie's Sporting Goods had the following inventory records for one line of skis for the month of January: Assuming the periodic LIFO inventory method is used,what is the cost of Marie's ending inventory?

Alana's Clothing Store sells jeans. During January 2014, its inventory records for one brand of designer jeans were as follows: -See information for Alana's Clothing Store above.Using this information,the cost of goods sold using the average cost method is

Goods on consignment should be included in the inventory of

Which inventory pricing method best approximates specific identification in most manufacturing situations?

Which of the following is NOT true of the perpetual inventory method?

Paper Depot is a wholesaler of office supplies. The activity for Model III calculators during August is shown below: -See information for Paper Depot above.If Paper Depot uses a LIFO periodic inventory system,the ending inventory of Model III calculators at August 31 is reported as

When using the periodic inventory method,which of the following generally would NOT be separately accounted for in the computation of cost of goods sold?

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll,pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters

Exam 9: Inventory and Cost of Goods Sold

The specific identification method of inventory costing

The following information is available from Carron Company's 2014 accounting records: Carron's 2014 cost of goods sold is

Selected information from the 2011 and 2010 financial statements of Bin Company is presented below: Bin Company's merchandise inventory turnover for 2014 is

The LIFO inventory cost flow method may be applied to which of the following inventory systems?

If a company experiences a liquidation of a LIFO inventory layer in the second quarter that is expected to be restored by the end of the annual financial reporting period,the company should

In a period of rising prices,the inventory cost allocation method that tends to result in the lowest reported net income is

Marie's Sporting Goods had the following inventory records for one line of skis for the month of January: Assuming the periodic LIFO inventory method is used,what is the cost of Marie's ending inventory?

Alana's Clothing Store sells jeans. During January 2014, its inventory records for one brand of designer jeans were as follows: -See information for Alana's Clothing Store above.Using this information,the cost of goods sold using the average cost method is

Goods on consignment should be included in the inventory of

Which inventory pricing method best approximates specific identification in most manufacturing situations?

Which of the following is NOT true of the perpetual inventory method?

Paper Depot is a wholesaler of office supplies. The activity for Model III calculators during August is shown below: -See information for Paper Depot above.If Paper Depot uses a LIFO periodic inventory system,the ending inventory of Model III calculators at August 31 is reported as

When using the periodic inventory method,which of the following generally would NOT be separately accounted for in the computation of cost of goods sold?

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll,pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters