Question 1

Damaged merchandise that can be sold only at prices below cost should be valued at

Accepted Answer

A)   net realizable value
B)   LIFO
C)   FIFO
D)   average costE) B) and D)
F) All of the above

Question 2

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

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

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Beginning inventory,purchases,and sales for an inventory item are as follows:
​
  Assuming a perpetual inventory system and the last-in,first-out method,determine (a)the cost of the goods sold for the September 30 sale and (b)the inventory on September 30.

Accepted Answer

(a)Cost of goods sold:8 units ...

Question 5

If a company uses a periodic inventory system,the gross profit method can be used to estimate inventory for monthly or quarterly statements.

Accepted Answer

A) True 
 B)False

Question 6

A company will most likely use an estimated method of determining inventory when

Accepted Answer

A)   the company decides not to do a physical inventory
B)   a natural disaster has destroyed most of the inventory
C)   the company has not kept up with its inventory records
D)   the company is preparing annual financial statementsE) B) and D)
F) None of the above

Question 7

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 8

If 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 averageE) B) and C)
F) A) and C)

Question 9

The inventory data for an item for November are: Using a perpetual system,what is the cost of the goods sold for November if the company uses LIFO?

Accepted Answer

A)   $610
B)   $600
C)   $590
D)   $580E) B) and D)
F) All of the above

Question 10

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 goods sold and ending inventory using FIFO.

Accepted Answer

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

Question 11

Which of the following companies would be more likely to use the specific identification inventory costing method?

Accepted Answer

A)   Gordon's Jewelers
B)   Lowe's
C)   Best Buy
D)   WalmartE) A) and B)
F) C) and D)

Question 12

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)   $3,815E) B) and C)
F) None of the above

Question 13

Beginning inventory,purchases,and sales for an inventory item are as follows:
​
  Assuming a perpetual inventory system and the first-in,first-out method,determine (a)the cost of the goods sold for the September 30 sale and (b)the inventory on September 30.

Accepted Answer

a)Cost of goods sold:7 units @...

Question 14

Unsold consigned merchandise should be included in the consignee's inventory.

Accepted Answer

A) True 
 B)False

Question 15

In the retail inventory method,the cost to retail ratio is equal to the cost of goods sold divided by the retail price of the goods sold.

Accepted Answer

A) True 
 B)False

Question 16

Kristin's Boutiques has identified the following items for possible inclusion in its December 31 inventory.Which of the following would not be included in the year-end inventory?

Accepted Answer

A)   Merchandise purchased FOB shipping point was picked up by the freight company but had still not arrived at Kristin's Boutique as of December 31.
B)   Kristin has in its warehouse merchandise on consignment from Abby Co.
C)   Kristin has sent merchandise to various retailers on a consignment basis.
D)   Kristin has inventory on hand which has been returned by customers because of wrong size.E) A) and D)
F) C) and D)

Question 17

If the perpetual inventory system is used,the inventory account is debited for purchases of merchandise.

Accepted Answer

A) True 
 B)False

Question 18

During a period of consistently rising prices,the method of inventory that will result in reporting the greatest cost of goods sold is

Accepted Answer

A)   FIFO
B)   LIFO
C)   average cost
D)   weighted averageE) None of the above
F) A) and B)

Question 19

Which of the following is not an example for safeguarding inventory?

Accepted Answer

A)   Storing inventory in restricted areas.
B)   Physical devices such as two-way mirrors,cameras,and alarms.
C)   Matching receiving documents,purchase orders,and vendor's invoice.
D)   Returning inventory that is defective or broken.E) B) and D)
F) A) and B)

Question 20

Assuming that the company uses the perpetual inventory system,determine the cost of goods sold for the sale of May 20 using the LIFO inventory cost method.

Accepted Answer

A)   $136
B)   $144
C)   $180
D)   $120E) A) and D)
F) B) and D)

Exam 6: Inventories

During a period of consistently rising prices,the method of inventory that will result in reporting the greatest cost of goods sold is

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The inventory data for an item for November are: Using a perpetual system,what is the cost of the goods sold for November if the company uses LIFO?

Correct AnswerverifiedShow Answer

Assuming that the company uses the perpetual inventory system,determine the cost of goods sold for the sale of May 20 using the LIFO inventory cost method.

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Unsold consigned merchandise should be included in the consignee's inventory.

Correct AnswerverifiedShow Answer

What is the amount of the inventory at the end of the year using the LIFO method?

Correct AnswerverifiedShow Answer

Damaged merchandise that can be sold only at prices below cost should be valued at

Correct AnswerverifiedShow Answer

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 goods sold and ending inventory using FIFO.

Correct AnswerverifiedShow Answer

Beginning inventory,purchases,and sales for an inventory item are as follows: ​ Assuming a perpetual inventory system and the last-in,first-out method,determine (a)the cost of the goods sold for the September 30 sale and (b)the inventory on September 30.

Correct Answerverified(a)Cost of goods sold:8 units ...View AnswerShow Answer

A company will most likely use an estimated method of determining inventory when

Correct AnswerverifiedShow Answer

If a company uses a periodic inventory system,the gross profit method can be used to estimate inventory for monthly or quarterly statements.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following companies would be more likely to use the specific identification inventory costing method?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not an example for safeguarding inventory?

Correct AnswerverifiedShow Answer

Kristin's Boutiques has identified the following items for possible inclusion in its December 31 inventory.Which of the following would not be included in the year-end inventory?

Correct AnswerverifiedShow Answer

Beginning inventory,purchases,and sales for an inventory item are as follows: ​ Assuming a perpetual inventory system and the first-in,first-out method,determine (a)the cost of the goods sold for the September 30 sale and (b)the inventory on September 30.

Correct Answerverifieda)Cost of goods sold:7 units @...View AnswerShow Answer

In the retail inventory method,the cost to retail ratio is equal to the cost of goods sold divided by the retail price of the goods sold.

Correct AnswerverifiedShow Answer

If the perpetual inventory system is used,the inventory account is debited for purchases of merchandise.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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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 goods sold and ending inventory using FIFO.

Correct Answer
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Beginning inventory,purchases,and sales for an inventory item are as follows: Assuming a perpetual inventory system and the last-in,first-out method,determine (a)the cost of the goods sold for the September 30 sale and (b)the inventory on September 30.

Correct Answer
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(a)Cost of goods sold:8 units ...
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Beginning inventory,purchases,and sales for an inventory item are as follows: Assuming a perpetual inventory system and the first-in,first-out method,determine (a)the cost of the goods sold for the September 30 sale and (b)the inventory on September 30.

Correct Answer
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a)Cost of goods sold:7 units @...
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