Question 1

Which is not a good reason to use the specific invoice method?

Accepted Answer

A) The flow of goods and flow of cost are the same. 
B) It can be used with goods with large sales volume. 
C) It is simple to use if there is a small amount of high-cost unique goods. 
D) Costs are matched with the sales they helped to produce. 
A) The flow of goods and flow of cost are the same. 
B) It can be used with goods with large sales volume. 
C) It is simple to use if there is a small amount of high-cost unique goods. 
D) Costs are matched with the sales they helped to produce.

Question 2

Nicki's Pet Supply needs to estimate its ending inventory. Using the data below, compute Nicki's estimated cost of ending inventory for the month of April.

Accepted Answer

The answer of Nicki's Pet Supply needs to estimate its...

Question 3

In a perpetual inventory system, the Merchandise Inventory account is updated:

Accepted Answer

A) at the end of the accounting period. 
B) once each month. 
C) when merchandise is purchased. 
D) The account never needs updating. 
A) at the end of the accounting period. 
B) once each month. 
C) when merchandise is purchased. 
D) The account never needs updating.

Question 4

A credit customer purchased $450 worth of items. Two days later, the customer returned $300 worth of those items. The entry to record this under the perpetual inventory method would include:

Accepted Answer

A) a debit to Sales Returns and Allowances $300; credit Accounts Receivable $300. 
B) a debit to Merchandise Inventory for our cost. 
C) a credit to Cost of Goods Sold for our cost. 
D) All of the above. 
A) a debit to Sales Returns and Allowances $300; credit Accounts Receivable $300. 
B) a debit to Merchandise Inventory for our cost. 
C) a credit to Cost of Goods Sold for our cost. 
D) All of the above.

Question 5

Which of the following goods should Pin Department Store include in its December 31 count?

Accepted Answer

A) Goods held on consignment from ABC Wholesale 
B) Goods sold and shipped to Gray Brothers, in-transit F.O.B shipping point. 
C) Goods that have been consigned to Dalton Brothers 
D) Goods in transit purchased F.O.B. destination point 
A) Goods held on consignment from ABC Wholesale 
B) Goods sold and shipped to Gray Brothers, in-transit F.O.B shipping point. 
C) Goods that have been consigned to Dalton Brothers 
D) Goods in transit purchased F.O.B. destination point

Question 6

Journalize the following assuming periodic inventory.

Accepted Answer

The answer of Journalize the following assuming periodic inventory.
 ...

Question 7

The principle of consistency states that:

Accepted Answer

A) changes in accounting methods should occur from one fiscal period to the next. 
B) a company cannot change from one inventory valuation method to another. 
C) a company should switch from LIFO to FIFO every other period. 
D) by using the same method, the financial statements are more meaningful. 
A) changes in accounting methods should occur from one fiscal period to the next. 
B) a company cannot change from one inventory valuation method to another. 
C) a company should switch from LIFO to FIFO every other period. 
D) by using the same method, the financial statements are more meaningful.

Question 8

Given the following accounts:
   Indicate the account(s)to be debited and credited to record the following transactions.
-Paid for merchandise after the discount period expired. - Perpetual
Debit ________ & ________ Credit ________ & ________

Accepted Answer

The answer of Given the following accounts:
   Indicate...

Question 9

The beginning inventory of this year is overstated. This error would cause:

Accepted Answer

A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the period end assets to be understated. 
D) None of these are correct. 
A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the period end assets to be understated. 
D) None of these are correct.

Question 10

The inventory method that matches old costs with current selling prices is:

Accepted Answer

A) LIFO. 
B) FIFO. 
C) weighted-average. 
D) specific invoice. 
A) LIFO. 
B) FIFO. 
C) weighted-average. 
D) specific invoice.

Question 11

Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system.
   May 1-31 Sales 130 units
a)________ FIFO
b)________ LIFO
c)________ Weighted-average

Accepted Answer

a)FIFO (50 × $25)+ (80 × $28)=

Question 12

Merchandise Inventory is an expense account.

Accepted Answer

A) True 
 B)False

Question 13

A company should use the specific invoice method to value items such as automobiles for retail sale.

Accepted Answer

A) True 
 B)False

Question 14

This inventory method produces the lowest income tax during a period of inflation.

Accepted Answer

A) LIFO 
B) FIFO 
C) Weighted-average 
D) All would have the same tax effect. 
A) LIFO 
B) FIFO 
C) Weighted-average 
D) All would have the same tax effect.

Question 15

Prepare journal entries for the following transactions for HO Train Shop applying the perpetual inventory system. Omit explanations.

Accepted Answer

The answer of Prepare journal entries for the following transactions...

Question 16

Inventory purchases are entered in the Merchandise Inventory account at the expected sales price amount.

Accepted Answer

A) True 
 B)False

Question 17

When merchandise is sold, the perpetual inventory system requires a debit to Cost of Goods Sold and a credit to Merchandise Inventory.

Accepted Answer

A) True 
 B)False

Question 18

Joe owns an auto parts store called Joe's Auto Care. The following transactions took place during November of the current year.
   Journalize the above transactions using the perpetual inventory system.

Accepted Answer

The answer of Joe owns an auto parts store called...

Question 19

Items that are very similar, such as canned goods in a grocery store would be costed using the ________ system of inventory valuation.

Accepted Answer

The answer of Items that are very similar, such as...

Question 20

Which of the following accounts is used with a periodic inventory system?

Accepted Answer

A) Purchases 
B) Purchases Discounts 
C) Purchases Returns and Allowances 
D) All of these answers are correct. 
A) Purchases 
B) Purchases Discounts 
C) Purchases Returns and Allowances 
D) All of these answers are correct.

Exam 15: Accounting for Merchandise Inventory

Which is not a good reason to use the specific invoice method?

Nicki's Pet Supply needs to estimate its ending inventory. Using the data below, compute Nicki's estimated cost of ending inventory for the month of April.

In a perpetual inventory system, the Merchandise Inventory account is updated:

A credit customer purchased $450 worth of items. Two days later, the customer returned $300 worth of those items. The entry to record this under the perpetual inventory method would include:

Which of the following goods should Pin Department Store include in its December 31 count?

Journalize the following assuming periodic inventory.

The principle of consistency states that:

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Paid for merchandise after the discount period expired. - Perpetual Debit ________ & ________ Credit ________ & ________

The beginning inventory of this year is overstated. This error would cause:

The inventory method that matches old costs with current selling prices is:

Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. May 1-31 Sales 130 units a)________ FIFO b)________ LIFO c)________ Weighted-average

Merchandise Inventory is an expense account.

A company should use the specific invoice method to value items such as automobiles for retail sale.

This inventory method produces the lowest income tax during a period of inflation.

Prepare journal entries for the following transactions for HO Train Shop applying the perpetual inventory system. Omit explanations.

Inventory purchases are entered in the Merchandise Inventory account at the expected sales price amount.

When merchandise is sold, the perpetual inventory system requires a debit to Cost of Goods Sold and a credit to Merchandise Inventory.

Joe owns an auto parts store called Joe's Auto Care. The following transactions took place during November of the current year. Journalize the above transactions using the perpetual inventory system.

Items that are very similar, such as canned goods in a grocery store would be costed using the ________ system of inventory valuation.

Which of the following accounts is used with a periodic inventory system?

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes: the Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Paid for merchandise after the discount period expired. - Perpetual Debit & Credit &

Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. May 1-31 Sales 130 units a) FIFO b) LIFO c) Weighted-average