Question 1

When merchandise sold is assumed to be in the order in which the purchases were made, the company is using

Accepted Answer

A)  first-in, last-out 
B)  last-in, first-out 
C)  first-in, first-out 
D)  average cost 
A)  first-in, last-out 
B)  last-in, first-out 
C)  first-in, first-out 
D)  average cost C

Question 2

Beginning inventory, purchases and sales data for T-shirts are as follows:
   Assuming the business maintains a periodic inventory system, calculate the cost of merchandise sold and ending inventory under the following assumptions:
a. FIFO
b. LIFO
c. Average cost (round cost of merchandise sold and ending inventory to the nearest dollar)

Accepted Answer

a. Cost of Merchandise Sold = $642.00
Ending Inventory = $180 (12 units @ $15)
  b. Cost of Merchandise Sold = $702.00
Ending Inventory = $120 (12 units @ $10)
   c. Cost of Merchandise Sold = $12.09 x 56 = $677.00
Ending Inventory = $12.09 x 12 units = $145.00

Question 3

The beginning inventory and purchases of an item for the period were as follows:
   The company uses the periodic system, and there were 15 units in the inventory at the end of the period. Determine the cost of the 15 units in the inventory by each of the following methods, presenting details of your computations: (a) first-in, first-out; (b) last-in, first-out; (c) average cost. Do not round your intermediate calculations. Round your final answer to two decimal places.

Accepted Answer

(a)
   (b)
   (c)

Question 4

A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are in the possession of the consignor.

Accepted Answer

A) True 
 B)False

Question 5

The inventory data for an item for November are: $\begin{array}{rll}
\text { Nov. } 1 & \text { Inventory } & 20 \text { units at } \$ 19 \
4 & \text { Sold } & 10 \text { units } \
10 & \text { Purchased } & 30 \text { units at } \$ 20 \
17 & \text { Sold } & 20 \text { units } \
30 & \text { Purchased } & 10 \text { units at } \$ 21
\end{array}$ Using a perpetual system, what is the cost of the merchandise sold for November if the company uses LIFO?

Accepted Answer

A)  $610 
B)  $600 
C)  $590 
D)  $580 
A)  $610 
B)  $600 
C)  $590 
D)  $580

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The units of Manganese Plus available for sale during the year were as follows:
   There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost by (a) FIFO, (b) LIFO, and (c) average cost methods.

Accepted Answer

The answer of The units of Manganese Plus available for...

Question 8

The two most widely used methods for determining the cost of inventory are

Accepted Answer

A)  FIFO and LIFO 
B)  FIFO and average 
C)  LIFO and average 
D)  gross profit and average 
A)  FIFO and LIFO 
B)  FIFO and average 
C)  LIFO and average 
D)  gross profit and average

Question 9

Describe three inventory cost flow assumptions and how they impact the financial statements.

Accepted Answer

1. Cost flow is in the order in which co

Question 10

If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.

Accepted Answer

A) True 
 B)False

Question 11

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

Accepted Answer

A) True 
 B)False

Question 12

Under the LIFO inventory costing method, the most recent costs are assigned to ending inventory.

Accepted Answer

A) True 
 B)False

Question 13

The following units of a particular item were available for sale during the year:
   The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO?

Accepted Answer

$187,700 [($755 ´ 30

Question 14

Based upon the following data estimate the cost of ending merchandise inventory:

Accepted Answer

The answer of Based upon the following data estimate the...

Question 15

The method of computing inventory that uses records of the selling prices of the merchandise is called

Accepted Answer

A)  retail method 
B)  last-in, first-out 
C)  first-in, first-out 
D)  average cost 
A)  retail method 
B)  last-in, first-out 
C)  first-in, first-out 
D)  average cost

Question 16

Determine the total value of the merchandise using Net Realizable Value: $\begin{array} { | l | l | l | l | } 
\hline \text { Item } & \text { Quantity } & \text { Selling Price } & \text { Commission } \
\hline \text { Doll } & 10 & \$ 7 & \$ 2 \
\hline \text { Horse } & 5 & 9 & 3 \
\hline
\end{array}$

Accepted Answer

A)  $35 
B)  $80 
C)  $115 
D)  $25 
A)  $35 
B)  $80 
C)  $115 
D)  $25

Question 17

Beginning inventory, purchases and sales data for widgets are as follows:
   
Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using LIFO.

Accepted Answer

The answer of Beginning inventory, purchases and sales data for...

Question 18

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

Accepted Answer

A) True 
 B)False

Question 19

Beginning inventory, purchases and sales data for tennis rackets are as follows:
  Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using FIFO.

Accepted Answer

The answer of Beginning inventory, purchases and sales data for...

Question 20

Inventory controls start when the merchandise is shelved in the store area.

Accepted Answer

A) True 
 B)False

Exam 6: Inventories

When merchandise sold is assumed to be in the order in which the purchases were made, the company is using

A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are in the possession of the consignor.

The inventory data for an item for November are: Nov. 1 Inventory 20 units at \ 19 4 Sold 10 units 10 Purchased 30 units at \ 20 17 Sold 20 units 30 Purchased 10 units at \ 21 Using a perpetual system, what is the cost of the merchandise sold for November if the company uses LIFO?

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

The units of Manganese Plus available for sale during the year were as follows: There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost by (a) FIFO, (b) LIFO, and (c) average cost methods.

The two most widely used methods for determining the cost of inventory are

Describe three inventory cost flow assumptions and how they impact the financial statements.

If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

Under the LIFO inventory costing method, the most recent costs are assigned to ending inventory.

The following units of a particular item were available for sale during the year: The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO?

Based upon the following data estimate the cost of ending merchandise inventory:

The method of computing inventory that uses records of the selling prices of the merchandise is called

Determine the total value of the merchandise using Net Realizable Value: Item Quantity Selling Price Commission Doll 10 \ 7 \ 2 Horse 5 9 3

Beginning inventory, purchases and sales data for widgets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using LIFO.

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

Beginning inventory, purchases and sales data for tennis rackets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using FIFO.

Inventory controls start when the merchandise is shelved in the store area.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Filters