Question 1

The following information is available for Prudhoe Company:
 
Cost of goods sold was

Accepted Answer

A) $325,000. 
B) $305,000. 
C) $275,000. 
D) $255,000. 
A) $325,000. 
B) $305,000. 
C) $275,000. 
D) $255,000.

Question 2

A firm using the perpetual inventory method returned defective merchandise costing $3,500 to one of its suppliers.The entry to record this transaction will include a debit to

Accepted Answer

A) Accounts Receivable. 
B) Inventory. 
C) Purchase Returns and Allowances. 
D) Accounts Payable. 
A) Accounts Receivable. 
B) Inventory. 
C) Purchase Returns and Allowances. 
D) Accounts Payable.

Question 3

The following information is available for the Fawcett Company for 2014:
   
The cost of goods sold is equal to 400% of selling expenses.Compute the cost of goods available for sale.

Accepted Answer

The answer of The following information is available for the...

Question 4

During the year,The Mound Company purchased $1,920,000 of inventory.The cost of goods sold for the year was $1,800,000 and the ending inventory at December 31 was $360,000.What was the inventory turnover for the year?

Accepted Answer

A) 6.0 
B) 5.0 
C) 5.3 
D) 6.4 
A) 6.0 
B) 5.0 
C) 5.3 
D) 6.4

Question 5

Carryon Co.,a manufacturer,had inventories at the beginning and end of its current year as follows:
 
During the year,the following costs and expenses were incurred:
 
Carryon's cost of goods sold for the year is

Accepted Answer

A) $257,000. 
B) $260,500. 
C) $261,000. 
D) $269,500. 
A) $257,000. 
B) $260,500. 
C) $261,000. 
D) $269,500.

Question 6

Which of the following would NOT be reported as inventory?

Accepted Answer

A) Land acquired for resale by a real estate firm 
B) Stocks and bonds held for resale by a brokerage firm 
C) Partially completed goods held by a manufacturing company 
D) Machinery acquired by a manufacturing company for use in the production process 
A) Land acquired for resale by a real estate firm 
B) Stocks and bonds held for resale by a brokerage firm 
C) Partially completed goods held by a manufacturing company 
D) Machinery acquired by a manufacturing company for use in the production process

Question 7

The data below relate to Raw Material H,which is stocked by Mason Inc.in its warehousing operation:
   
From these data,provide answers for the following [show computations for (1)]:
(1)Assuming a perpetual inventory system is used,compute the ending inventory under (a)FIFO and (b)LIFO.
(2)If a perpetual inventory of Raw Material H is kept on a moving average basis,the ending inventory will be:
(a)lower than the LIFO basis.
(b)higher than the FIFO basis.
(c)lower than the FIFO basis.
(d)impossible to determine.

Accepted Answer

The answer of The data below relate to Raw Material...

Question 8

Following are the account balances from Browne Company's income statement:
 
Given this information,the cost of merchandise available for sale during 2014 is

Accepted Answer

A) $65,000. 
B) $59,000. 
C) $69,000. 
D) $61,000. 
A) $65,000. 
B) $59,000. 
C) $69,000. 
D) $61,000.

Question 9

Digipro Inc. is a wholesaler of photography equipment. The activity for the VTC cameras during July is shown below:
  
-See information for Digipro Inc.above.If Digipro Inc.uses the average cost method to account for inventory,the ending inventory of VTC cameras at July 31 is reported as

Accepted Answer

A) $153,400. 
B) $156,912. 
C) $158,736. 
D) $159,464. 
A) $153,400. 
B) $156,912. 
C) $158,736. 
D) $159,464.

Question 10

Which of the following inventory costing methods reports most closely the current cost of inventory on the balance sheet?

Accepted Answer

A) FIFO 
B) Specific identification 
C) Weighted average 
D) LIFO 
A) FIFO 
B) Specific identification 
C) Weighted average 
D) LIFO

Question 11

The inventory account of Offearl Company at December 31,2014,included the following items:
   
Based on this information,the inventory account at December 31,2014,should be reduced by what amount?

Accepted Answer

Amounts that should

Question 12

Which of the following will occur when inventory costs are decreasing?

Accepted Answer

A) LIFO will result in lower net income and lower ending inventory than will FIFO. 
B) FIFO will result in lower net income and lower ending inventory than will LIFO. 
C) LIFO will result in a lower net income, but a higher ending inventory, than will FIFO. 
D) FIFO will result in a lower net income, but a higher ending inventory, than will LIFO. 
A) LIFO will result in lower net income and lower ending inventory than will FIFO. 
B) FIFO will result in lower net income and lower ending inventory than will LIFO. 
C) LIFO will result in a lower net income, but a higher ending inventory, than will FIFO. 
D) FIFO will result in a lower net income, but a higher ending inventory, than will LIFO.

Question 13

The following information is available for Jimmy Corporation for the month of June:
 
Given this information,the ending inventory balance using the average cost method is

Accepted Answer

A) $276. 
B) $302. 
C) $368. 
D) $386. 
A) $276. 
B) $302. 
C) $368. 
D) $386.

Question 14

The claim is sometimes made that the retail cost method is an approximation of the weighted-average method since the cost-to-retail percentage is computed as a weighted average of the cost-retail relationship of all goods available for sale during the period.
Required:
Evaluate the validity of the statement above.

Accepted Answer

An approximation of weighted-average cos

Question 15

On October 31,a flood at Comfort Company's only warehouse caused severe damage to its entire inventory.Based on recent history,Comfort has a gross profit of 40 percent of net sales.The following information is available from Comfort's records for the ten months ended October 31:
 
A physical inventory disclosed usable damaged goods which Comfort estimates can be sold for $70,000.Using the gross profit method,the estimated cost of goods sold for the ten months ended October 31 should be

Accepted Answer

A) $680,000. 
B) $1,080,000 
C) $3,120,000. 
D) $3,640,000. 
A) $680,000. 
B) $1,080,000 
C) $3,120,000. 
D) $3,640,000.

Question 16

The following information was obtained from the accounts of Marion Company:
 
Given this information,the cost of goods sold during the year is

Accepted Answer

A) $46,000. 
B) $41,000. 
C) $51,000. 
D) $61,000. 
A) $46,000. 
B) $41,000. 
C) $51,000. 
D) $61,000.

Question 17

Cost of goods sold is equal to

Accepted Answer

A) the cost of inventory on hand at the end of a period plus net purchases minus the cost of inventory on hand at the beginning of a period. 
B) the cost of inventory on hand at the beginning of a period minus net purchases plus the cost of inventory on hand at the end of a period. 
C) the cost of inventory on hand at the beginning of a period plus net sales minus the cost of inventory on hand at the end of a period. 
D) the cost of inventory on hand at the beginning of a period plus net purchases minus the cost of inventory on hand at the end of a period. 
A) the cost of inventory on hand at the end of a period plus net purchases minus the cost of inventory on hand at the beginning of a period. 
B) the cost of inventory on hand at the beginning of a period minus net purchases plus the cost of inventory on hand at the end of a period. 
C) the cost of inventory on hand at the beginning of a period plus net sales minus the cost of inventory on hand at the end of a period. 
D) the cost of inventory on hand at the beginning of a period plus net purchases minus the cost of inventory on hand at the end of a period.

Question 18

If the replacement cost of a unit of inventory has declined below original cost,but the replacement cost exceeds net realizable value,the amount to be used for purposes of inventory valuation is

Accepted Answer

A) net realizable value. 
B) original cost. 
C) market value. 
D) net realizable value less a normal profit margin. 
A) net realizable value. 
B) original cost. 
C) market value. 
D) net realizable value less a normal profit margin.

Question 19

The skeleton of the basic retail inventory calculation is presented below:
   
Required:
Explain how the following items would affect the computation of ending inventory using the retail inventory method:
1.Freight-in.
2.Purchase returns.
3.Sales returns and allowances.
4.Normal spoilage.
5.Discounts to employees and favored customers.

Accepted Answer

1.Freight-in adds to the cost of merchan

Question 20

Tonale Company began operations in 2014.During the first two years of operations,Tonale made undiscovered errors in taking its year-end inventories that overstated 2014 ending inventory by $50,000 and overstated 2015 ending inventory by $40,000.The combined effect of these errors on reported income is

Accepted Answer

The answer of Tonale Company began operations in 2014.During the...

The following information is available for Prudhoe Company: Cost of goods sold was

A firm using the perpetual inventory method returned defective merchandise costing $3,500 to one of its suppliers.The entry to record this transaction will include a debit to

The following information is available for the Fawcett Company for 2014: The cost of goods sold is equal to 400% of selling expenses.Compute the cost of goods available for sale.

During the year,The Mound Company purchased $1,920,000 of inventory.The cost of goods sold for the year was $1,800,000 and the ending inventory at December 31 was $360,000.What was the inventory turnover for the year?

Carryon Co.,a manufacturer,had inventories at the beginning and end of its current year as follows: During the year,the following costs and expenses were incurred: Carryon's cost of goods sold for the year is

Which of the following would NOT be reported as inventory?

Following are the account balances from Browne Company's income statement: Given this information,the cost of merchandise available for sale during 2014 is

Digipro Inc. is a wholesaler of photography equipment. The activity for the VTC cameras during July is shown below: -See information for Digipro Inc.above.If Digipro Inc.uses the average cost method to account for inventory,the ending inventory of VTC cameras at July 31 is reported as

Which of the following inventory costing methods reports most closely the current cost of inventory on the balance sheet?

The inventory account of Offearl Company at December 31,2014,included the following items: Based on this information,the inventory account at December 31,2014,should be reduced by what amount?

Which of the following will occur when inventory costs are decreasing?

The following information is available for Jimmy Corporation for the month of June: Given this information,the ending inventory balance using the average cost method is

The following information was obtained from the accounts of Marion Company: Given this information,the cost of goods sold during the year is

Cost of goods sold is equal to

If the replacement cost of a unit of inventory has declined below original cost,but the replacement cost exceeds net realizable value,the amount to be used for purposes of inventory valuation is

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 following information is available for Prudhoe Company: Cost of goods sold was

A firm using the perpetual inventory method returned defective merchandise costing $3,500 to one of its suppliers.The entry to record this transaction will include a debit to

The following information is available for the Fawcett Company for 2014: The cost of goods sold is equal to 400% of selling expenses.Compute the cost of goods available for sale.

During the year,The Mound Company purchased $1,920,000 of inventory.The cost of goods sold for the year was $1,800,000 and the ending inventory at December 31 was $360,000.What was the inventory turnover for the year?

Carryon Co.,a manufacturer,had inventories at the beginning and end of its current year as follows: During the year,the following costs and expenses were incurred: Carryon's cost of goods sold for the year is

Which of the following would NOT be reported as inventory?

Following are the account balances from Browne Company's income statement: Given this information,the cost of merchandise available for sale during 2014 is

Digipro Inc. is a wholesaler of photography equipment. The activity for the VTC cameras during July is shown below: -See information for Digipro Inc.above.If Digipro Inc.uses the average cost method to account for inventory,the ending inventory of VTC cameras at July 31 is reported as

Which of the following inventory costing methods reports most closely the current cost of inventory on the balance sheet?

The inventory account of Offearl Company at December 31,2014,included the following items: Based on this information,the inventory account at December 31,2014,should be reduced by what amount?

Which of the following will occur when inventory costs are decreasing?

The following information is available for Jimmy Corporation for the month of June: Given this information,the ending inventory balance using the average cost method is

The following information was obtained from the accounts of Marion Company: Given this information,the cost of goods sold during the year is

Cost of goods sold is equal to

If the replacement cost of a unit of inventory has declined below original cost,but the replacement cost exceeds net realizable value,the amount to be used for purposes of inventory valuation is

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