Question 1

​Excess inventory results in all of the following except

Accepted Answer

A)  ​tied-up funds that could be used to improve operations 
B)  ​lost sales 
C)  ​increased storage expense 
D)  ​increased risk of loss due to damage 
A)  ​tied-up funds that could be used to improve operations 
B)  ​lost sales 
C)  ​increased storage expense 
D)  ​increased risk of loss due to damage

Question 2

While taking a physical inventory,a company counts its inventory as less than the actual amount on hand.How will this error affect the income statement?

Accepted Answer

Net income

Question 3

If a company mistakenly counts less items during a physical inventory than actually exist,how will the error affect the cost of goods sold?

Accepted Answer

A)  understated 
B)  overstated 
C)  no change 
D)  only inventory will be affected 
A)  understated 
B)  overstated 
C)  no change 
D)  only inventory will be affected

Question 4

For the year ended December 31,Depot Max's cost of goods sold was $56,900.Inventory at the beginning of the year was $6,540.Ending inventory was $7,250.Compute Depot Max's inventory turnover for the year.

Accepted Answer

A)  8.7 
B)  7.8 
C)  8.3 
D)  44.0 
A)  8.7 
B)  7.8 
C)  8.3 
D)  44.0

Question 5

The following data were taken from Castle,Inc.
Determine the inventory turnover ratio and the number of days' sales in inventory for Castle Inc.Round to two decimal places.

Accepted Answer

Inventory turnover = Cost of goods sold

Question 6

The value of ending inventory using FIFO is ​

Accepted Answer

A)  $1,250 
B)  $1,350 
C)  $1,375 
D)  $1,150 
A)  $1,250 
B)  $1,350 
C)  $1,375 
D)  $1,150

Question 7

If the cost of an item of inventory is $60 and the current replacement cost is $75,the amount included in inventory according to the lower of cost or market is

Accepted Answer

A)  $15 
B)  $60 
C)  $75 
D)  $135 
A)  $15 
B)  $60 
C)  $75 
D)  $135

Question 8

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

Accepted Answer

The answer of Fill in the missing amounts from the...

Question 9

What is the amount of cost of goods sold for the year according to the LIFO method?

Accepted Answer

A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250 
A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250

Question 10

Complete the chart,indicating whether LIFO or FIFO would give the highest and lowest amounts for each item,assuming a period of increasing costs.

Accepted Answer

The answer of Complete the chart,indicating whether LIFO or FIFO...

Question 11

Control of inventory should begin as soon as the inventory is received.Which of the following internal control steps is not done to meet this goal?

Accepted Answer

A)  check the invoice to the receiving report 
B)  check the invoice to the purchase order 
C)  check the invoice with the person who specifically purchased the item 
D)  check the invoice extensions and totals 
A)  check the invoice to the receiving report 
B)  check the invoice to the purchase order 
C)  check the invoice with the person who specifically purchased the item 
D)  check the invoice extensions and totals

Question 12

Under the _____ inventory method,accounting records maintain a continuously updated inventory value.

Accepted Answer

A)  retail 
B)  periodic 
C)  physical 
D)  perpetual 
A)  retail 
B)  periodic 
C)  physical 
D)  perpetual

Question 13

All of the following are reasons to use an estimated method of costing inventory except ​

Accepted Answer

A)  Perpetual inventory records are not maintained. 
B)  Purchase records are not maintained. 
C)  A disaster has destroyed the inventory records and the inventory. 
D)  Interim financial statements are required but physical inventory is only taken at the end of the financial accounting period. 
A)  Perpetual inventory records are not maintained. 
B)  Purchase records are not maintained. 
C)  A disaster has destroyed the inventory records and the inventory. 
D)  Interim financial statements are required but physical inventory is only taken at the end of the financial accounting period.

Question 14

​All of the following are documents used for inventory control except

Accepted Answer

A)  a ​petty cash voucher 
B)  a ​vendor's invoice 
C)  ​a receiving report 
D)  ​a purchase order 
A)  a ​petty cash voucher 
B)  a ​vendor's invoice 
C)  ​a receiving report 
D)  ​a purchase order

Question 15

The weighted average cost method will always yield results between FIFO and LIFO.

Accepted Answer

A) True 
 B)False

Question 16

During the taking of its physical inventory on December 31,2014,Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000.The effect on the balance sheet and income statement would be

Accepted Answer

A)  assets overstated by $70,000; retained earnings understated by $70,000; and net income statement understated by $70,000 
B)  assets overstated by $70,000; retained earnings understated by $70,000; and no effect on the income statement 
C)  assets,retained earnings,and net income all overstated by $70,000 
D)  assets and retained earnings overstated by $70,000; and net income understated by $70,000 
A)  assets overstated by $70,000; retained earnings understated by $70,000; and net income statement understated by $70,000 
B)  assets overstated by $70,000; retained earnings understated by $70,000; and no effect on the income statement 
C)  assets,retained earnings,and net income all overstated by $70,000 
D)  assets and retained earnings overstated by $70,000; and net income understated by $70,000

Question 17

During periods of increasing costs,an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

Accepted Answer

A) True 
 B)False

Question 18

Generally,the lower the number of days' sales in inventory,the better.

Accepted Answer

A) True 
 B)False

Question 19

Of the three widely used inventory costing methods (FIFO,LIFO,and average cost),the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

Accepted Answer

A) True 
 B)False

Question 20

Average cost periodic (round average to nearest cent)

Accepted Answer

Total sales (not dep

Exam 6: Inventories

​Excess inventory results in all of the following except

While taking a physical inventory,a company counts its inventory as less than the actual amount on hand.How will this error affect the income statement?

If a company mistakenly counts less items during a physical inventory than actually exist,how will the error affect the cost of goods sold?

For the year ended December 31,Depot Max's cost of goods sold was $56,900.Inventory at the beginning of the year was $6,540.Ending inventory was $7,250.Compute Depot Max's inventory turnover for the year.

The following data were taken from Castle,Inc. Determine the inventory turnover ratio and the number of days' sales in inventory for Castle Inc.Round to two decimal places.

The value of ending inventory using FIFO is ​

If the cost of an item of inventory is $60 and the current replacement cost is $75,the amount included in inventory according to the lower of cost or market is

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

What is the amount of cost of goods sold for the year according to the LIFO method?

Complete the chart,indicating whether LIFO or FIFO would give the highest and lowest amounts for each item,assuming a period of increasing costs.

Control of inventory should begin as soon as the inventory is received.Which of the following internal control steps is not done to meet this goal?

Under the _____ inventory method,accounting records maintain a continuously updated inventory value.

All of the following are reasons to use an estimated method of costing inventory except ​

​All of the following are documents used for inventory control except

The weighted average cost method will always yield results between FIFO and LIFO.

During the taking of its physical inventory on December 31,2014,Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000.The effect on the balance sheet and income statement would be

During periods of increasing costs,an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

Generally,the lower the number of days' sales in inventory,the better.

Of the three widely used inventory costing methods (FIFO,LIFO,and average cost),the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

Average cost periodic (round average to nearest cent)

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

Excess inventory results in all of the following except

The value of ending inventory using FIFO is

All of the following are reasons to use an estimated method of costing inventory except

All of the following are documents used for inventory control except