Exam 6: Merchandise Inventory

In a period of rising costs,the last-in,first-out (LIFO)method results in lower cost of goods sold and higher net income than the first-in,first-out (FIFO)method.

When using the weighted-average inventory costing method in a perpetual inventory system,a new weighted average cost per unit is computed at the end of each quarter.

Which of the following remains the same regardless of the inventory costing method used by a company? Assume the cost of inventory is rising.

Harris,Inc.had the following balances and transactions during 2017: What would be reported for Cost of Goods Sold on the income statement for the year ending December 31,2017 if the perpetual inventory system and the last-in,first-out inventory costing method are used?

When using the LIFO inventory costing method,ending merchandise inventory will be the lowest,as compared to FIFO and weighted-average inventory costing methods,when costs are increasing.

When a company uses the perpetual inventory method,which of the following would be the entry to adjust inventory to lower-of-cost-or-market?

Inventory turnover measures ________.

The disclosure principle states that a company should report enough information for outsiders to make knowledgeable decisions about the company.

Ending inventory is calculated by multiplying the number of units on hand by the unit cost.

The periodic inventory records of Witte Veterinary Supply indicate the following for the month of April: As of April 30,Witte counts 8 units of merchandise inventory on hand. Compute ending merchandise inventory and cost of goods sold for Witte using the weighted-average inventory method.(Round the per unit cost to two decimal places. )

Best Deals,Inc.has 10 units in ending merchandise inventory on December 31.The units were purchased in November for $160 each.The price lists from suppliers indicate the current replacement cost of the item to be $162 each.What would be the amount reported as Merchandise Inventory on the balance sheet?

A company purchased 100 units for $30 each on January 31.It purchased 400 units for $20 each on February 28.It sold a total of 470 units for $110 each from March 1 through December 31.If the company uses the last-in,first-out inventory costing method,calculate the amount of ending inventory on December 31.(Assume that the company uses a perpetual inventory system. )

The days' sales in inventory ratio is calculated by dividing cost of goods sold by the average merchandise inventory.

In the weighted-average inventory costing method,when using the periodic inventory system,a single weighted average cost per using is computed for the entire period.

When a company uses the first-in,first-out (FIFO)method,the cost of goods sold correlates to the most recently purchased goods,and the value of ending inventory correlates to the oldest goods in stock.

Exposition,Inc.had 200 units of inventory on hand at the end of the year.These were recorded at a cost of $14 each using the last-in,first-out (LIFO)method.The current replacement cost is $10 per unit.The selling price charged by Exposition,Inc.for each finished product is $16.As a result of recording the adjusting entry as per the lower-of-cost-or-market rule,the gross profit will ________.

The goal of reporting realistic figures and never overstating assets or net income applies to the ________.

Given the same purchase and sales data,and assuming the cost of inventory is rising,the costing methods for inventory will result in different amounts for sales revenue.

A company that uses the perpetual inventory system sold goods to a customer for cash for $3,000.The cost of the goods sold was $600.Which of the following journal entries correctly records this transaction?

Maintaining good controls over merchandise inventory ensures that inventory purchases are properly authorized and accounted for by the accounting system.