Question 1

The inventory turnover ratio is a measure of how many times during a period a company sells off its inventory.

Accepted Answer

A) True 
 B)False

Question 2

If a change in accounts payable was added back to net income on the statement of cash flows prepared using the indirect method,then the amount owed to suppliers during the period had decreased.

Accepted Answer

A) True 
 B)False

Question 3

Asago Co.sold merchandise to Health Co.on account,$18,000,terms 2/15,net 45.The cost of the merchandise sold is $15,500.Asago Co.issued a credit memo for $1,750 for merchandise returned that originally cost $1,400.The Health Co.paid the invoice within the discount period.What is amount of net sales from the above transactions?

Accepted Answer

A) $16,250 
B) $14,100 
C) $15,925 
D) $13,818 
A) $16,250 
B) $14,100 
C) $15,925 
D) $13,818

Question 4

Baucus,Inc.
Baucus,Inc.reported the following information for 2014 and 2013:
   Refer to the information for Baucus,Inc.
How much is net sales for 2014? What other components that Baucus did not report could be included in this computation?

Accepted Answer

$951,200 (Sales)- $1

Question 5

Share,Inc.
The following data is available for one of the products sold by Share,Inc. ,which uses a perpetual inventory system.
   Refer to the data for Share,Inc.
If the moving average method is used,how much is cost of goods sold for May?

Accepted Answer

The answer of Share,Inc.
The following data is available for one...

Question 6

Baucus,Inc.
Baucus,Inc.reported the following information for 2014 and 2013:
   Refer to the information for Baucus,Inc.
How much is cost of goods sold for 2014?

Accepted Answer

$580,000 (Purchases)+ $18,000

Question 7

Sales returns and allowances is a contra ____________________ account.

Accepted Answer

The answer of Sales returns and allowances is a contra...

Question 8

The Ramien Store held inventory items at the end of 2014.Which items should Ramien include as part of its total inventory cost?

Accepted Answer

A) Freight incurred in shipping goods to customers. 
B) Annual income taxes paid for operations. 
C) Cost of storing inventory before it is sold. 
D) Cost of salaries of clerks that sell the inventory items. 
A) Freight incurred in shipping goods to customers. 
B) Annual income taxes paid for operations. 
C) Cost of storing inventory before it is sold. 
D) Cost of salaries of clerks that sell the inventory items.

Question 9

A departure from the cost basis of accounting may be necessary when the _________________________ of the inventory is less than its cost to the company.

Accepted Answer

The answer of A departure from the cost basis of...

Question 10

Shipping terms of ___________________________________ mean that the buyer pays shipping costs.

Accepted Answer

The answer of Shipping terms of ___________________________________ mean that the...

Question 11

Cooking Corner
Cooking Corner reported inventory on its balance sheet at December 31,2013 at $32,000.During 2014,Cooking Corner purchased goods totaling $634,000 on account with terms of 2/10,n/30,FOB shipping point.Total charges paid by Cooking Corner directly to the freight company were $1,000.At the end of 2014,inventory on hand totaled to $45,000.Net sales for 2014 totaled $1,300,000.Cooking Corner employs a periodic inventory system.
Refer to the information about Cooking Corner.
How much is cost of goods available for sale for 2014 assuming Cooking Corner takes advantage of one-half of the cash discounts?

Accepted Answer

$32,000 (Beginning I

Question 12

Zebra Company overstated its December 31,2014 inventory by $5,200.Which statement is true concerning Zebra's financial statement amounts for 2014?

Accepted Answer

A) Working capital is understated. 
B) The current ratio is overstated. 
C) Cost of goods sold is overstated. 
D) Net income is understated. 
A) Working capital is understated. 
B) The current ratio is overstated. 
C) Cost of goods sold is overstated. 
D) Net income is understated.

Question 13

Both U.S.GAAP and international financial reporting standards (IFRS)require the use
of the lower-of-cost-or-market rule to value inventories.

Accepted Answer

A) True 
 B)False

Question 14

Summer,Inc.has been in business for 20 years.During that time the company has consistently used the LIFO inventory costing method.Because of inflation,prices for merchandise have increased consistently over the 20 years.The company has maintained the same inventory quantities over the 20-year period.Which one of the following statements is true?

Accepted Answer

A) Summer,Inc.'s total net income for the past 20 years is greater than it would have reported using another inventory method 
B) Summer,Inc.will have paid more income taxes over the past 20 years than it would have if it had used the FIFO method. 
C) Summer will have to continue using the LIFO method indefinitely because of generally accepted accounting principles and federal income tax rules. 
D) The ending inventory figure reported on the balance sheet may be significantly lower than its current value. 
A) Summer,Inc.'s total net income for the past 20 years is greater than it would have reported using another inventory method 
B) Summer,Inc.will have paid more income taxes over the past 20 years than it would have if it had used the FIFO method. 
C) Summer will have to continue using the LIFO method indefinitely because of generally accepted accounting principles and federal income tax rules. 
D) The ending inventory figure reported on the balance sheet may be significantly lower than its current value.

Question 15

If a company overstates its ending inventory for the current year,what are the effects on cost of goods sold and net income for the current year? Effect on Effect on
Cost of Goods Sold Net Income

Accepted Answer

A) Understated Overstated 
B) Overstated No effect 
C) Understated Understated 
D) Overstated Overstated 
A) Understated Overstated 
B) Overstated No effect 
C) Understated Understated 
D) Overstated Overstated

Question 16

Sunset,Inc.purchased merchandise from Rumble Music Company on June 5,2014.The goods were shipped the same day.The merchandise's selling price was $15,000.The credit terms were 1/10,n/30.The shipping terms were FOB shipping point.Sunset received the merchandise on June 10,2014.Sunset paid the amount due on June 13,2014. Sunset uses the periodic inventory system.What effect does recording the purchase of merchandise on June 5,2014 have on Sunset's accounting equation?

Accepted Answer

A) Assets and liabilities increase. 
B) Liabilities increase and stockholders' equity decreases. 
C) Assets and stockholders' equity increase. 
D) Liabilities and stockholders' equity decrease. 
A) Assets and liabilities increase. 
B) Liabilities increase and stockholders' equity decreases. 
C) Assets and stockholders' equity increase. 
D) Liabilities and stockholders' equity decrease.

Question 17

For each of the following,calculate the cost of inventory reported on the balance sheet.

Accepted Answer

The answer of For each of the following,calculate the cost...

Question 18

Eversoll Inc.uses the periodic inventory system.   If Eversoll uses the FIFO inventory method,the amount assigned to the June 30 inventory would be

Accepted Answer

A) $1,354.00 
B) $1,366.50 
C) $1,590.42 
D) $1,594.00 
A) $1,354.00 
B) $1,366.50 
C) $1,590.42 
D) $1,594.00

Question 19

Purchase returns and allowances is subtracted from cost of goods sold to determine net purchases.

Accepted Answer

A) True 
 B)False

Question 20

Which one of the following is correct?

Accepted Answer

A) Inventory losses can be identified and controlled better under the perpetual system. 
B) Inventory can only be sold at the end of an accounting period under the periodic system. 
C) There is no difference in cost to implement a perpetual as compared to a periodic system. 
D) The perpetual system eliminates the need for an annual inventory count 
A) Inventory losses can be identified and controlled better under the perpetual system. 
B) Inventory can only be sold at the end of an accounting period under the periodic system. 
C) There is no difference in cost to implement a perpetual as compared to a periodic system. 
D) The perpetual system eliminates the need for an annual inventory count

The inventory turnover ratio is a measure of how many times during a period a company sells off its inventory.

If a change in accounts payable was added back to net income on the statement of cash flows prepared using the indirect method,then the amount owed to suppliers during the period had decreased.

Baucus,Inc. Baucus,Inc.reported the following information for 2014 and 2013: Refer to the information for Baucus,Inc. How much is net sales for 2014? What other components that Baucus did not report could be included in this computation?

Share,Inc. The following data is available for one of the products sold by Share,Inc. ,which uses a perpetual inventory system. Refer to the data for Share,Inc. If the moving average method is used,how much is cost of goods sold for May?

Baucus,Inc. Baucus,Inc.reported the following information for 2014 and 2013: Refer to the information for Baucus,Inc. How much is cost of goods sold for 2014?

Sales returns and allowances is a contra ____________________ account.

The Ramien Store held inventory items at the end of 2014.Which items should Ramien include as part of its total inventory cost?

A departure from the cost basis of accounting may be necessary when the _________________________ of the inventory is less than its cost to the company.

Shipping terms of ___________________________________ mean that the buyer pays shipping costs.

Zebra Company overstated its December 31,2014 inventory by $5,200.Which statement is true concerning Zebra's financial statement amounts for 2014?

Both U.S.GAAP and international financial reporting standards (IFRS)require the use of the lower-of-cost-or-market rule to value inventories.

If a company overstates its ending inventory for the current year,what are the effects on cost of goods sold and net income for the current year? Effect on Effect on Cost of Goods Sold Net Income

For each of the following,calculate the cost of inventory reported on the balance sheet.

Eversoll Inc.uses the periodic inventory system. If Eversoll uses the FIFO inventory method,the amount assigned to the June 30 inventory would be

Purchase returns and allowances is subtracted from cost of goods sold to determine net purchases.

Which one of the following is correct?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 5: Inventories and Cost of Goods Sold

The inventory turnover ratio is a measure of how many times during a period a company sells off its inventory.

If a change in accounts payable was added back to net income on the statement of cash flows prepared using the indirect method,then the amount owed to suppliers during the period had decreased.

Baucus,Inc. Baucus,Inc.reported the following information for 2014 and 2013: Refer to the information for Baucus,Inc. How much is net sales for 2014? What other components that Baucus did not report could be included in this computation?

Share,Inc. The following data is available for one of the products sold by Share,Inc. ,which uses a perpetual inventory system. Refer to the data for Share,Inc. If the moving average method is used,how much is cost of goods sold for May?

Baucus,Inc. Baucus,Inc.reported the following information for 2014 and 2013: Refer to the information for Baucus,Inc. How much is cost of goods sold for 2014?

Sales returns and allowances is a contra ____________________ account.

The Ramien Store held inventory items at the end of 2014.Which items should Ramien include as part of its total inventory cost?

A departure from the cost basis of accounting may be necessary when the _________________________ of the inventory is less than its cost to the company.

Shipping terms of ___________________________________ mean that the buyer pays shipping costs.

Zebra Company overstated its December 31,2014 inventory by $5,200.Which statement is true concerning Zebra's financial statement amounts for 2014?

Both U.S.GAAP and international financial reporting standards (IFRS)require the use of the lower-of-cost-or-market rule to value inventories.

If a company overstates its ending inventory for the current year,what are the effects on cost of goods sold and net income for the current year? Effect on Effect on Cost of Goods Sold Net Income

For each of the following,calculate the cost of inventory reported on the balance sheet.

Eversoll Inc.uses the periodic inventory system. If Eversoll uses the FIFO inventory method,the amount assigned to the June 30 inventory would be

Purchase returns and allowances is subtracted from cost of goods sold to determine net purchases.

Which one of the following is correct?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters