Question 1

When units are purchased at different costs over time,it is simple to determine the cost per unit assigned to inventory.

Accepted Answer

A) True 
 B)False

Question 2

Using the retail inventory method,if the cost to retail ratio is 60% and ending inventory at retail is $45,000,then estimated ending inventory at cost is $27,000.

Accepted Answer

A) True 
 B)False

Question 3

A company made the following merchandise purchases and sales during the current month:
   There was no beginning inventory.If the company uses the last-in,first-out perpetual inventory system,what would be the cost of the ending inventory?

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 4

If the seller is responsible for paying freight charges,then ownership of inventory passes when goods arrive at their destination.

Accepted Answer

A) True 
 B)False

Question 5

A company normally sells its product for $20 per unit.However,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has now fallen to $13 per unit.Calculate the value of this company's inventory at the lower of cost or market.

Accepted Answer

A) $2,550 
B) $2,600 
C) $2,700 
D) $3,000 
E) $3,200 
A) $2,550 
B) $2,600 
C) $2,700 
D) $3,000 
E) $3,200

Question 6

A company has inventory of 15 units at a cost of $12 each on August 1.On August 5,they purchased 10 units at $13 per unit.On August 12,they purchased 20 units at $14 per unit.On August 15,they sold 30 units.Using the FIFO periodic inventory method,what is the value of the inventory at August 15 after the sale?

Accepted Answer

A) $140 
B) $160 
C) $210 
D) $380 
E) $590 
A) $140 
B) $160 
C) $210 
D) $380 
E) $590

Question 7

Given the following information,determine the cost of ending inventory at November 30 using the LIFO perpetual inventory method.
November 3: 15 units were purchased at $8 per unit.
November 11: 18 units were purchased at $9.50 per unit.
November 15: 15 units were sold at $45 per unit.
November 18: 30 units were purchased at $10.75 per unit.
November 30: 20 units were sold at $55 per unit.

Accepted Answer

The answer of Given the following information,determine the cost of...

Question 8

An error in the period-end inventory causes an offsetting error in the next period and therefore:

Accepted Answer

A) Managers can ignore the error. 
B) It is sometimes said to be self-correcting. 
C) It affects only income statement accounts. 
D) If affects only balance sheet accounts. 
E) Is immaterial for managerial decision making. 
A) Managers can ignore the error. 
B) It is sometimes said to be self-correcting. 
C) It affects only income statement accounts. 
D) If affects only balance sheet accounts. 
E) Is immaterial for managerial decision making.

Question 9

Evaluate each inventory error separately and determine whether it overstates or understates cost of goods sold and net income.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 10

Discuss the important accounting features of a periodic inventory system including accounts and procedures used.

Accepted Answer

Each purchase of merchandise is debited

Question 11

In applying the lower of cost or market method to inventory valuation,market is defined as:

Accepted Answer

A) Historical cost 
B) Current replacement cost 
C) Current sales price 
D) FIFO 
E) LIFO 
A) Historical cost 
B) Current replacement cost 
C) Current sales price 
D) FIFO 
E) LIFO

Question 12

The understatement of the ending inventory balance causes:

Accepted Answer

A) Cost of goods sold to be overstated and net income to be understated. 
B) Cost of goods sold to be overstated and net income to be overstated. 
C) Cost of goods sold to be understated and net income to be understated. 
D) Cost of goods sold to be understated and net income to be overstated. 
E) Cost of goods sold to be overstated and net income to be correct. 
A) Cost of goods sold to be overstated and net income to be understated. 
B) Cost of goods sold to be overstated and net income to be overstated. 
C) Cost of goods sold to be understated and net income to be understated. 
D) Cost of goods sold to be understated and net income to be overstated. 
E) Cost of goods sold to be overstated and net income to be correct.

Question 13

An overstatement of ending inventory will cause

Accepted Answer

A) An overstatement of assets and equity on the balance sheet. 
B) An understatement of assets and equity on the balance sheet. 
C) An overstatement of assets and an understatement of equity on the balance sheet. 
D) An understatement of assets and an overstatement of equity on the balance sheet. 
E) No effect on the balance sheet. 
A) An overstatement of assets and equity on the balance sheet. 
B) An understatement of assets and equity on the balance sheet. 
C) An overstatement of assets and an understatement of equity on the balance sheet. 
D) An understatement of assets and an overstatement of equity on the balance sheet. 
E) No effect on the balance sheet.

Question 14

A company made the following merchandise purchases and sales during the month of May:
   There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

Accepted Answer

@#IMG-DLM&_TB6947_00_TB6947_00

Question 15

When applying the lower of cost or market method of inventory valuation,market is defined as the ______________________.

Accepted Answer

The answer of When applying the lower of cost or...

Question 16

The ______________________ method of assigning costs to inventory and cost of goods sold requires that the cost of goods available for sale be divided by the units of inventory available when each sale takes place.

Accepted Answer

weighted a

Question 17

A company had 240 units of inventory at a cost of $148 each on April 1.On April 5,the company purchased 440 units of inventory for $168 each.On April 12,the company purchased 140 units for $208 each.On April 20,480 units were sold.Given this information,determine the cost of the 480 units sold using the weighted average periodic inventory method.(Do not round your intermediate calculations; round the final answer to nearest dollar amount.)

Accepted Answer

A) $57,452. 
B) $63,120. 
C) $65,120. 
D) $81,108. 
E) $83,108. 
A) $57,452. 
B) $63,120. 
C) $65,120. 
D) $81,108. 
E) $83,108.

Question 18

An understatement of ending inventory will cause an understatement of assets and equity on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

A corporation uses a LIFO perpetual inventory system. August 2,25 units were purchased at $12 per unit.
August 5,10 units were purchased at $13 per unit.
August 15,12 units were sold at $25 per unit.
August 18,15 units were purchased at $14 per unit.
What was the amount of the ending inventory for the month of August?

Accepted Answer

A) $496.00 
B) $486.00 
C) $492.57 
D) $300.00 
E) $510.00 
A) $496.00 
B) $486.00 
C) $492.57 
D) $300.00 
E) $510.00

Question 20

If obsolete or damaged goods can be sold,they will be included in inventory at their net realizable value.

Accepted Answer

A) True 
 B)False

When units are purchased at different costs over time,it is simple to determine the cost per unit assigned to inventory.

Using the retail inventory method,if the cost to retail ratio is 60% and ending inventory at retail is $45,000,then estimated ending inventory at cost is $27,000.

A company made the following merchandise purchases and sales during the current month: There was no beginning inventory.If the company uses the last-in,first-out perpetual inventory system,what would be the cost of the ending inventory?

If the seller is responsible for paying freight charges,then ownership of inventory passes when goods arrive at their destination.

An error in the period-end inventory causes an offsetting error in the next period and therefore:

Evaluate each inventory error separately and determine whether it overstates or understates cost of goods sold and net income.

Discuss the important accounting features of a periodic inventory system including accounts and procedures used.

In applying the lower of cost or market method to inventory valuation,market is defined as:

The understatement of the ending inventory balance causes:

An overstatement of ending inventory will cause

A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

When applying the lower of cost or market method of inventory valuation,market is defined as the ______________________.

The ______________________ method of assigning costs to inventory and cost of goods sold requires that the cost of goods available for sale be divided by the units of inventory available when each sale takes place.

An understatement of ending inventory will cause an understatement of assets and equity on the balance sheet.

If obsolete or damaged goods can be sold,they will be included in inventory at their net realizable value.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 5: Reporting and Analyzing Inventories

When units are purchased at different costs over time,it is simple to determine the cost per unit assigned to inventory.

Using the retail inventory method,if the cost to retail ratio is 60% and ending inventory at retail is $45,000,then estimated ending inventory at cost is $27,000.

A company made the following merchandise purchases and sales during the current month: There was no beginning inventory.If the company uses the last-in,first-out perpetual inventory system,what would be the cost of the ending inventory?

If the seller is responsible for paying freight charges,then ownership of inventory passes when goods arrive at their destination.

An error in the period-end inventory causes an offsetting error in the next period and therefore:

Evaluate each inventory error separately and determine whether it overstates or understates cost of goods sold and net income.

Discuss the important accounting features of a periodic inventory system including accounts and procedures used.

In applying the lower of cost or market method to inventory valuation,market is defined as:

The understatement of the ending inventory balance causes:

An overstatement of ending inventory will cause

A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

When applying the lower of cost or market method of inventory valuation,market is defined as the ______________________.

The ______________________ method of assigning costs to inventory and cost of goods sold requires that the cost of goods available for sale be divided by the units of inventory available when each sale takes place.

An understatement of ending inventory will cause an understatement of assets and equity on the balance sheet.

If obsolete or damaged goods can be sold,they will be included in inventory at their net realizable value.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters