Question 1

In periods of falling prices,LIFO will result in a higher ending inventory valuation than FIFO.

Accepted Answer

A) True 
 B)False

Question 2

What is the chief objective of supply-chain management? How is it accomplished?

Accepted Answer

The chief objective of supply-chain mana

Question 3

The lower the inventory turnover,the lower the days' inventory on hand.

Accepted Answer

A) True 
 B)False

Question 4

Goods held on consignment are

Accepted Answer

A) kept for sale on the premises of the consignee. 
B) included as part of no one's ending inventory. 
C) owned by the consignee. 
D) included in the consignee's ending inventory. 
A) kept for sale on the premises of the consignee. 
B) included as part of no one's ending inventory. 
C) owned by the consignee. 
D) included in the consignee's ending inventory.

Question 5

Which costing method can only be used when it is possible to identify units as coming from specific purchases?

Accepted Answer

A) Specific identification 
B) FIFO 
C) Average-cost 
D) LIFO 
A) Specific identification 
B) FIFO 
C) Average-cost 
D) LIFO

Question 6

Despite its advantages,the just-in-time operating environment produces increased carrying costs for inventory.

Accepted Answer

A) True 
 B)False

Question 7

The LIFO method agrees with the actual physical goods flow in most businesses.

Accepted Answer

A) True 
 B)False

Question 8

Inventory is an example of a long-term asset.

Accepted Answer

A) True 
 B)False

Question 9

Why are cost flow assumptions made when accounting for merchandise inventory?

Accepted Answer

With changing prices,one would have to c

Question 10

Use this information to answer the following question.   A periodic inventory system is used.
-Ending inventory under LIFO is

Accepted Answer

A) $452. 
B) $429. 
C) $214. 
D) $237. 
A) $452. 
B) $429. 
C) $214. 
D) $237.

Question 11

The gross profit method requires that records be kept at both cost and retail.

Accepted Answer

A) True 
 B)False

Question 12

Use the following figures (stated in millions of dollars)to compute the inventory
turnover and the days' inventory on hand within one decimal point:
   a.Inventory turnover = ___________________
b.Days' inventory on hand = ___________________

Accepted Answer

a.$13,168 ¸ [($1,830

Question 13

Use this inventory information for the month of March to answer the following question.   
-Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

Accepted Answer

A) $2,160 
B) $3,780 
C) $3,861 
D) $5,940 
A) $2,160 
B) $3,780 
C) $3,861 
D) $5,940

Question 14

The average-cost method under a periodic inventory system relies on a simple average calculation as total cost of goods available for sale divided by the total units available for sale.

Accepted Answer

A) True 
 B)False

Question 15

Use this inventory information for the month of May to answer the following questions.   Assuming that a perpetual inventory system is used.
-What is ending inventory on a LIFO basis?

Accepted Answer

A) More information is needed. 
B) $10,240 
C) $5,440 
D) $5,760 
A) More information is needed. 
B) $10,240 
C) $5,440 
D) $5,760

Question 16

Use this inventory information for the month of July to answer the following question.   
-Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

Accepted Answer

A) $7,696 
B) $7,736 
C) $3,664 
D) $3,704 
A) $7,696 
B) $7,736 
C) $3,664 
D) $3,704

Question 17

Which of the following would normally be included in the inventory?

Accepted Answer

A) Outgoing goods shipped FOB destination 
B) Goods sold but not yet delivered 
C) Incoming goods shipped FOB destination 
D) Goods held on consignment 
A) Outgoing goods shipped FOB destination 
B) Goods sold but not yet delivered 
C) Incoming goods shipped FOB destination 
D) Goods held on consignment

Question 18

The specific identification method and the FIFO method produce the same results under both the perpetual and periodic inventory systems.

Accepted Answer

A) True 
 B)False

Question 19

What is a LIFO liquidation,and what is its effect on income before income taxes?

Accepted Answer

Under LIFO,ending inventory is assumed t

Question 20

Which costing method tends to level out the effects of cost increases or decreases?

Accepted Answer

A) Specific identification 
B) FIFO 
C) Average-cost 
D) LIFO 
A) Specific identification 
B) FIFO 
C) Average-cost 
D) LIFO

Exam 6: Inventories

In periods of falling prices,LIFO will result in a higher ending inventory valuation than FIFO.

What is the chief objective of supply-chain management? How is it accomplished?

The lower the inventory turnover,the lower the days' inventory on hand.

Goods held on consignment are

Which costing method can only be used when it is possible to identify units as coming from specific purchases?

Despite its advantages,the just-in-time operating environment produces increased carrying costs for inventory.

The LIFO method agrees with the actual physical goods flow in most businesses.

Inventory is an example of a long-term asset.

Why are cost flow assumptions made when accounting for merchandise inventory?

Use this information to answer the following question. A periodic inventory system is used. -Ending inventory under LIFO is

The gross profit method requires that records be kept at both cost and retail.

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand within one decimal point: a.Inventory turnover = ___________________ b.Days' inventory on hand = ___________________

Use this inventory information for the month of March to answer the following question. -Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

The average-cost method under a periodic inventory system relies on a simple average calculation as total cost of goods available for sale divided by the total units available for sale.

Use this inventory information for the month of May to answer the following questions. Assuming that a perpetual inventory system is used. -What is ending inventory on a LIFO basis?

Use this inventory information for the month of July to answer the following question. -Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

Which of the following would normally be included in the inventory?

The specific identification method and the FIFO method produce the same results under both the perpetual and periodic inventory systems.

What is a LIFO liquidation,and what is its effect on income before income taxes?

Which costing method tends to level out the effects of cost increases or decreases?

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

Filters

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand within one decimal point: a.Inventory turnover = _ b.Days' inventory on hand = _