Question 1

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 FIFO.

Accepted Answer

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

Question 2

The specific identification inventory method should be used when the inventory consists of identical, low cost units that are purchased and sold frequently.

Accepted Answer

A) True 
 B)False

Question 3

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:  If Addison uses LIFO, the cost of the ending merchandise inventory on September 30 is

Accepted Answer

A)  $800 
B)  $650 
C)  $750 
D)  $700

Question 4

On the basis of the following data, estimate the cost of the merchandise inventory at March 31 by the retail method:

Accepted Answer

The answer of On the basis of the following data,...

Question 5

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

Accepted Answer

The answer of Fill in the missing amounts from the...

Question 6

Basic inventory data for April 30 are presented below for a business that employs the lower of cost or market basis of inventory valuation.

Accepted Answer

The answer of Basic inventory data for April 30 are...

Question 7

The average cost inventory method is the rarely used with a perpetual inventory system.

Accepted Answer

A) True 
 B)False

Question 8

Use of the retail inventory method requires taking a physical count of inventory.

Accepted Answer

A) True 
 B)False

Question 9

During times of rising prices, which of the following is not an accurate statement?

Accepted Answer

A)  Average costing will yield results that are between those of FIFO and LIFO. 
B)  LIFO will result in a higher cost of goods sold than FIFO. 
C)  FIFO will result in a higher net income than LIFO. 
D)  LIFO will result in higher income taxes than FIFO.

Question 10

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. Compute Depot Max's inventory turnover for the year.

Accepted Answer

A)  8.7 
B)  7.8 
C)  8.3 
D)  44

Question 11

Match the following documents used for inventory control:

Accepted Answer

The answer of Match the following documents used for inventory...

Question 12

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 LIFO.

Accepted Answer

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

Question 13

The units of Product Green-2 available for sale during the year were as follows:
  There are 17 units of the product in the physical inventory at Sep 30. The periodic inventory system is used. Determine the cost of merchandise sold by (a) FIFO, (b) LIFO, and (c) average cost methods.

Accepted Answer

The answer of The units of Product Green-2 available for...

Question 14

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

Accepted Answer

The answer of Describe three inventory cost flow assumptions and...

Question 15

If the cost of an item of inventory is $60 and the current replacement cost is $75, the amount included in inventory according to the lower of cost or market is

Accepted Answer

A)  $15 
B)  $60 
C)  $75 
D)  $135

Question 16

When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is:

Accepted Answer

A)  debit Cost of Merchandise Sold; credit Sales 
B)  debit Cost of Merchandise Sold; credit Merchandise Inventory 
C)  debit Merchandise Inventory; credit Cost of Merchandise Sold 
D)  No journal entry is made to record the cost of merchandise sold.

Question 17

During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

Accepted Answer

A) True 
 B)False

Question 18

During August, the first month of the fiscal year, sales totaled $875,000 and the cost of merchandise available for sale totaled $700,000. Estimate the cost of the merchandise inventory as of August 31, based on an estimated gross profit rate of 45%.

Accepted Answer

The answer of During August, the first month of the...

Question 19

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

Question 20

Beginning inventory, purchases, and sales for Product - Weld TM are as follows:
  Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the cost of the merchandise sold for the September 30 sale and

Accepted Answer

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

Exam 7: Inventories

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 FIFO.

The specific identification inventory method should be used when the inventory consists of identical, low cost units that are purchased and sold frequently.

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: If Addison uses LIFO, the cost of the ending merchandise inventory on September 30 is

On the basis of the following data, estimate the cost of the merchandise inventory at March 31 by the retail method:

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

Basic inventory data for April 30 are presented below for a business that employs the lower of cost or market basis of inventory valuation.

The average cost inventory method is the rarely used with a perpetual inventory system.

Use of the retail inventory method requires taking a physical count of inventory.

During times of rising prices, which of the following is not an accurate statement?

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. Compute Depot Max's inventory turnover for the year.

Match the following documents used for inventory control:

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 LIFO.

The units of Product Green-2 available for sale during the year were as follows: There are 17 units of the product in the physical inventory at Sep 30. The periodic inventory system is used. Determine the cost of merchandise sold by (a) FIFO, (b) LIFO, and (c) average cost methods.

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

If the cost of an item of inventory is $60 and the current replacement cost is $75, the amount included in inventory according to the lower of cost or market is

When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is:

During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

During August, the first month of the fiscal year, sales totaled $875,000 and the cost of merchandise available for sale totaled $700,000. Estimate the cost of the merchandise inventory as of August 31, based on an estimated gross profit rate of 45%.

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?

Beginning inventory, purchases, and sales for Product - Weld TM are as follows: Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the cost of the merchandise sold for the September 30 sale and