Exam 6: Merchandise Inventory and Cost of Sales

Martock Company uses the periodic inventory system.The following information is available for the period ending December 31: (1)Sales: $30,000 (2)Beginning inventory: $17,500 (3)Ending inventory: $8,000 (4)Purchases: $10,000 The cost of goods sold for the period is:

(Multiple Choice)

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Question 21

When taking a physical count of inventory,the use of pre-numbered inventory tickets assists in the control process.

(True/False)

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Question 22

Toys "R" Us had cost of goods sold of $6,000 million,ending inventory of $2,500 million,and average inventory turnover of $2,000 million.The days' sales in inventory is:

(Multiple Choice)

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Question 23

If the supplier pays freight charges,then ownership of inventory passes when goods arrive at their destination.

(True/False)

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Question 24

Using the perpetual system,what are the three types of inventory cost flow assumptions?

(Essay)

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Question 25

Explain the effect of an error in inventory valuation on financial statements.

(Essay)

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Question 26

Evaluate each inventory error and determine whether it overstates or understates each item.

(Essay)

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Question 27

During a period of steadily falling prices,which inventory cost flow assumption results in reporting the lowest net income?

(Multiple Choice)

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Question 28

_________________ is the amount reported in the balance sheet when sales value of an inventory item is lower than cost.

(Short Answer)

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Question 29

All businesses should take an inventory count once each year to avoid inventory errors or shortages.

(True/False)

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Question 30

Goods on consignment:

(Multiple Choice)

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Question 31

The inventory cost flow assumption that is used cannot have a material impact on the financial statements.

(True/False)

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Question 32

During the current year,Carter Company reported $600,000 in sales,and purchased merchandise that cost $384,000.The company's beginning inventory and ending inventory was $60,000.Calculate the gross profit ratio.

(Essay)

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Question 33

The accepted method for valuing inventory includes:

(Multiple Choice)

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Question 34

Damaged goods are not counted in inventory if they cannot be sold.

(True/False)

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Question 35

The ________________________ ratio measures how much inventory is on hand in terms of days' sales.

(Short Answer)

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Question 36

To avoid the time-consuming process of taking an inventory each month,some companies use the gross profit method to estimate ending inventory.

(True/False)

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Question 37

The consistency principle helps ensure that financial statements are comparable across periods.

(True/False)

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Question 38

The pricing of an inventory where the purchase invoice of each item in the ending inventory is identified and used to determine the cost assigned to the inventory is:

(Multiple Choice)

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Question 39

Net realizable value for damaged or obsolete goods is sales price plus the cost of making the sale.

(True/False)

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Question 40

Showing 21 - 40 of 150

Martock Company uses the periodic inventory system.The following information is available for the period ending December 31: (1)Sales: $30,000 (2)Beginning inventory: $17,500 (3)Ending inventory: $8,000 (4)Purchases: $10,000 The cost of goods sold for the period is:

When taking a physical count of inventory,the use of pre-numbered inventory tickets assists in the control process.

Toys "R" Us had cost of goods sold of $6,000 million,ending inventory of $2,500 million,and average inventory turnover of $2,000 million.The days' sales in inventory is:

If the supplier pays freight charges,then ownership of inventory passes when goods arrive at their destination.

Using the perpetual system,what are the three types of inventory cost flow assumptions?

Explain the effect of an error in inventory valuation on financial statements.

Evaluate each inventory error and determine whether it overstates or understates each item.

During a period of steadily falling prices,which inventory cost flow assumption results in reporting the lowest net income?

_________________ is the amount reported in the balance sheet when sales value of an inventory item is lower than cost.

All businesses should take an inventory count once each year to avoid inventory errors or shortages.

Goods on consignment:

The inventory cost flow assumption that is used cannot have a material impact on the financial statements.

During the current year,Carter Company reported $600,000 in sales,and purchased merchandise that cost $384,000.The company's beginning inventory and ending inventory was $60,000.Calculate the gross profit ratio.

The accepted method for valuing inventory includes:

Damaged goods are not counted in inventory if they cannot be sold.

The ________________________ ratio measures how much inventory is on hand in terms of days' sales.

To avoid the time-consuming process of taking an inventory each month,some companies use the gross profit method to estimate ending inventory.

The consistency principle helps ensure that financial statements are comparable across periods.

The pricing of an inventory where the purchase invoice of each item in the ending inventory is identified and used to determine the cost assigned to the inventory is:

Net realizable value for damaged or obsolete goods is sales price plus the cost of making the sale.

Accounting in Business

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Accounting Information Systems

Internal Control and Cash

Receivables

Filters