Question 1

Which is NOT an assurance of footnote disclosures?

Accepted Answer

A)  Conservative information 
B)  Reliable information 
C)  Comparable information 
D)  Relevant information 
E)  Materiality

Question 2

Goods available for sale are $28,000; beginning inventory is $13,000; ending inventory is $15,000; and cost of goods sold is $39,000. What is the inventory turnover?

Accepted Answer

The answer of Goods available for sale are $28,000; beginning...

Question 3

Compare the effects of the different costing methods on the financial statements
-In order to pay the least income tax possible in periods of decreasing inventory costs, the company should use which of the following inventory costing methods?

Accepted Answer

A)  FIFO 
B)  Perpetual 
C)  Average cost 
D)  Specific identification 
E)  Periodic

Question 4

The amount of cost of goods sold is MOST influenced by the:

Accepted Answer

A)  cost of the items sold. 
B)  cost of the unsold items. 
C)  inventory method used. 
D)  number of items sold. 
E)  the physical flow of inventory.

Question 5

Cost of goods sold is shown on the:

Accepted Answer

A)  balance sheet as an asset. 
B)  income statement before gross profit. 
C)  statement of retained earnings. 
D)  income statement after gross profit. 
E)  balance sheet as a liability.

Question 6

Goods available for sale are $118,000; beginning inventory is $37,000; ending inventory is $42,000; and
cost of goods sold is $77,000. What is the inventory turnover?

Accepted Answer

The answer of Goods available for sale are $118,000; beginning...

Question 7

A piece of artwork would probably be inventoried using the specific-identification method.

Accepted Answer

A) True 
 B)False

Question 8

Compare the effects of the different costing methods on the financial statements
-Which method produces the lowest cost of goods sold and the highest gross profit when prices are
increasing?

Accepted Answer

The answer of Compare the effects of the different costing...

Question 9

Compare the effects of the different costing methods on the financial statements
-What are the benefits of using average costing?

Accepted Answer

The answer of Compare the effects of the different costing...

Question 10

Rick Company's beginning inventory and purchases during the fiscal year ended December 31, 2012 were as follows: (NOTE: The company uses a perpetual system of inventory.)
  
What is the ending inventory of Rick Company for 2012 using FIFO?

Accepted Answer

The answer of Rick Company's beginning inventory and purchases during...

Question 11

Which of the following would probably NOT cause inventory shrinkage?

Accepted Answer

A)  Employee theft 
B)  Spoilage of items 
C)  Spills of items 
D)  Correct counting of all inventory 
E)  Customer theft

Question 12

Cobra Corporation has given you the following inventory figures:
  
Using the gross profit method, calculate the estimated ending inventory to the nearest dollar. Show all calculations.

Accepted Answer

The answer of Cobra Corporation has given you the following...

Question 13

Changing from Average Cost to FIFO over two accounting periods could be viewed as a violation of what accounting concept or principle?

Accepted Answer

A)  Conservatism 
B)  Consistency 
C)  Materiality 
D)  Entity 
E)  Cost Principle

Question 14

The __________ estimates inventory by using the format for cost of goods sold.

Accepted Answer

The answer of The __________ estimates inventory by using the...

Question 15

What is the method of valuing inventory that is based on the assumption that the oldest goods will be
sold first?

Accepted Answer

The answer of What is the method of valuing inventory...

Question 16

Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs.
Below is the inventory record for Product C124.
  
What is the average cost per unit after the receipt of the June 21 inventory?

Accepted Answer

The answer of Isaiah Sporting Goods uses the perpetual average...

Question 17

Goods available for sale are $25,000; beginning inventory is $8,000; ending inventory is $12,000; and cost
of goods sold is $10,000. What is the inventory turnover?

Accepted Answer

The answer of Goods available for sale are $25,000; beginning...

Question 18

Inventory generates profit once it is stocked on the shelf.

Accepted Answer

A) True 
 B)False

Question 19

Customer demand for an item CANNOT:

Accepted Answer

A)  increase the inventory turnover. 
B)  decrease the inventory turnover. 
C)  affect the amount of merchandise the company purchases. 
D)  directly impact cash on the balance sheet. 
E)  affect sales.

Question 20

Gross profit is $40,000; beginning inventory is $16,000; ending inventory is $20,000; and sales are $120,000. Calculate the inventory turnover and days in inventory.

Accepted Answer

The answer of Gross profit is $40,000; beginning inventory is...

Exam 6: Inventory

Which is NOT an assurance of footnote disclosures?

Goods available for sale are $28,000; beginning inventory is $13,000; ending inventory is $15,000; and cost of goods sold is $39,000. What is the inventory turnover?

Compare the effects of the different costing methods on the financial statements -In order to pay the least income tax possible in periods of decreasing inventory costs, the company should use which of the following inventory costing methods?

The amount of cost of goods sold is MOST influenced by the:

Cost of goods sold is shown on the:

Goods available for sale are $118,000; beginning inventory is $37,000; ending inventory is $42,000; and cost of goods sold is $77,000. What is the inventory turnover?

A piece of artwork would probably be inventoried using the specific-identification method.

Compare the effects of the different costing methods on the financial statements -Which method produces the lowest cost of goods sold and the highest gross profit when prices are increasing?

Compare the effects of the different costing methods on the financial statements -What are the benefits of using average costing?

Rick Company's beginning inventory and purchases during the fiscal year ended December 31, 2012 were as follows: (NOTE: The company uses a perpetual system of inventory.) What is the ending inventory of Rick Company for 2012 using FIFO?

Which of the following would probably NOT cause inventory shrinkage?

Cobra Corporation has given you the following inventory figures: Using the gross profit method, calculate the estimated ending inventory to the nearest dollar. Show all calculations.

Changing from Average Cost to FIFO over two accounting periods could be viewed as a violation of what accounting concept or principle?

The __________ estimates inventory by using the format for cost of goods sold.

What is the method of valuing inventory that is based on the assumption that the oldest goods will be sold first?

Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs. Below is the inventory record for Product C124. What is the average cost per unit after the receipt of the June 21 inventory?

Goods available for sale are $25,000; beginning inventory is $8,000; ending inventory is $12,000; and cost of goods sold is $10,000. What is the inventory turnover?

Inventory generates profit once it is stocked on the shelf.

Customer demand for an item CANNOT:

Gross profit is $40,000; beginning inventory is $16,000; ending inventory is $20,000; and sales are $120,000. Calculate the inventory turnover and days in inventory.