Question 1

Cost flow is in the reverse order in which costs were incurred when using

Accepted Answer

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

Question 2

Cost flow is in the order in which costs were incurred when using

Accepted Answer

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

Question 3

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

Accepted Answer

A) True 
 B)False

Question 4

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 5

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 6

A perpetual inventory system is an effective means of control over inventory.

Accepted Answer

A) True 
 B)False

Question 7

The following units of an inventory item were available for sale during the year:   The firm uses the periodic inventory system. During the year, 60 units of the item were sold.
The value of ending inventory using LIFO 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 8

The following lots of a particular commodity were available for sale during the year:   The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year.
What is the amount of the inventory at the end of the year using the LIFO method?

Accepted Answer

A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,815 
A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,815

Question 9

Match the following documents used for inventory control:

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 10

Taking a physical count of inventory

Accepted Answer

A)  is not necessary when a periodic inventory system is used 
B)  should be done near year-end 
C)  has no internal control relevance 
D)  is not necessary when a perpetual inventory system is used 
A)  is not necessary when a periodic inventory system is used 
B)  should be done near year-end 
C)  has no internal control relevance 
D)  is not necessary when a perpetual inventory system is used

Question 11

If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

Accepted Answer

A)  average cost 
B)  LIFO 
C)  FIFO 
D)  weighted average 
A)  average cost 
B)  LIFO 
C)  FIFO 
D)  weighted average

Question 12

If a company uses the periodic inventory system to cost its inventory, the gross profit method is a method that can be used to check on theft when the actual inventory is taken by the company.

Accepted Answer

A) True 
 B)False

Question 13

On the basis of the following data, determine the estimated cost of the inventory as of March 31 by the retail method, presenting details of the computation in good order.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 14

For the year ended December 31, 2014 Depot Max's cost of merchandise sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days sales in inventory is closest to

Accepted Answer

A)  42 
B)  46 
C)  8 
D)  44 
A)  42 
B)  46 
C)  8 
D)  44

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The following lots of a particular commodity were available for sale during the year:   The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year.
What is the amount of the inventory at the end of the year using the average cost method?

Accepted Answer

A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,705 
A)  $1,685 
B)  $1,575 
C)  $1,805 
D)  $3,705

Question 17

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

Question 18

The following information was extracted from the Stone Company's records.
Gross Sales $232,566
Gross Profit $87,990
Sales Discounts $1,125 (= 1/2 % of Net Sales)
Total Operating Expenses $88, 440
Selling Expenses $33, 560
Complete the following:   Complete the following:

Accepted Answer

@#IMG-DLM&_TB2085_00_TB2085_00 * Net Sales: $1,125

Question 19

Use the following information to answer the following questions. The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.
  Assuming that the company uses the perpetual inventory system, determine the ending inventory value for the month of May using the FIFO inventory cost method.

Accepted Answer

A)  $364 
B)  $372 
C)  $324 
D)  $320 
A)  $364 
B)  $372 
C)  $324 
D)  $320

Question 20

The three identical units of Product Basic H are purchased during July, as shown below.
   Assume one unit sells on July 28 for $45.
Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using (a) first in first out, (b) last in last out, (c) average cost flow methods.

Accepted Answer

@#IMG-DLM&_TB2085_00

Cost flow is in the reverse order in which costs were incurred when using

Cost flow is in the order in which costs were incurred when using

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

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?

A perpetual inventory system is an effective means of control over inventory.

The following units of an inventory item were available for sale during the year: The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The value of ending inventory using LIFO is:

The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year using the LIFO method?

Match the following documents used for inventory control:

Taking a physical count of inventory

If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

If a company uses the periodic inventory system to cost its inventory, the gross profit method is a method that can be used to check on theft when the actual inventory is taken by the company.

On the basis of the following data, determine the estimated cost of the inventory as of March 31 by the retail method, presenting details of the computation in good order.

For the year ended December 31, 2014 Depot Max's cost of merchandise sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days sales in inventory is closest to

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

The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year using the average cost method?

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

The following information was extracted from the Stone Company's records. Gross Sales $232,566 Gross Profit $87,990 Sales Discounts $1,125 (= 1/2 % of Net Sales) Total Operating Expenses $88, 440 Selling Expenses $33, 560 Complete the following: Complete the following:

The three identical units of Product Basic H are purchased during July, as shown below. Assume one unit sells on July 28 for $45. Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using (a) first in first out, (b) last in last out, (c) average cost flow methods.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 7: Inventories

Cost flow is in the reverse order in which costs were incurred when using

Cost flow is in the order in which costs were incurred when using

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

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?

A perpetual inventory system is an effective means of control over inventory.

The following units of an inventory item were available for sale during the year: The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The value of ending inventory using LIFO is:

The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year using the LIFO method?

Match the following documents used for inventory control:

Taking a physical count of inventory

If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

If a company uses the periodic inventory system to cost its inventory, the gross profit method is a method that can be used to check on theft when the actual inventory is taken by the company.

On the basis of the following data, determine the estimated cost of the inventory as of March 31 by the retail method, presenting details of the computation in good order.

For the year ended December 31, 2014 Depot Max's cost of merchandise sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days sales in inventory is closest to

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

The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year using the average cost method?

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

The following information was extracted from the Stone Company's records. Gross Sales $232,566 Gross Profit $87,990 Sales Discounts $1,125 (= 1/2 % of Net Sales) Total Operating Expenses $88, 440 Selling Expenses $33, 560 Complete the following: Complete the following:

The three identical units of Product Basic H are purchased during July, as shown below. Assume one unit sells on July 28 for $45. Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using (a) first in first out, (b) last in last out, (c) average cost flow methods.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters