Question 1

Costs included in the Merchandise Inventory account can include all of the following except:

Accepted Answer

A)  Invoice price minus any discount.
B)  Transportation-in.
C)  Storage.
D)  Insurance.
E)  Damaged inventory that cannot be sold.F) C) and D)
G) B) and D)

Question 2

An overstated beginning inventory will ______________ cost of goods sold and _____________ net income.
answers must appear in this order

Accepted Answer

overstate ...

Question 3

If a period-end inventory amount is reported in error,it can cause a misstatement in all of the following except:

Accepted Answer

A)  Cost of goods sold.
B)  Gross profit.
C)  Net sales.
D)  Current assets.
E)  Net income.F) B) and E)
G) A) and D)

Question 4

The ______________________ method of assigning costs to inventory and cost of goods sold assumes that the most recent purchases are sold first.

Accepted Answer

last in,fi...

Question 5

Jammer Company uses a weighted average perpetual inventory system and reports the following:  What is the per-unit value of ending inventory on August 31?

Accepted Answer

A)  $12.00
B)  $13.80
C)  $15.42
D)  $16.00
E)  $17.74F) A) and E)
G) B) and C)

Question 6

A company made the following merchandise purchases and sales during the month of May:  There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

Accepted Answer

The answer of A company made the following merchandise purchases...

Question 7

Buffalo Company reported a December 31 ending inventory balance of $412,000.The following additional information is also available: ▪ The ending inventory balance of $412,000 did not include goods costing $48,000 that were purchased by Buffalo on December 28 and shipped FOB destination on that date.Buffalo did not receive the goods until January 2 of the following year.
▪ The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000.The net realizable value of the damaged goods was $10,000.
Based on this information,the correct balance for ending inventory on December 31 is:

Accepted Answer

A)  $374,000
B)  $384,000
C)  $460,000
D)  $422,000
E)  $438,000F) D) and E)
G) C) and E)

Question 8

Salmone Company reported the following purchases and sales of its only product.Salmone uses a perpetual inventory system.Determine the cost assigned to the ending inventory using FIFO.

Accepted Answer

A)  $2,260
B)  $3,180
C)  $1,860
D)  $3,580
E)  $2,100F) A) and D)
G) D) and E)

Question 9

Since an error in the period-end inventory causes an offsetting error in the next period:

Accepted Answer

A)  Managers can ignore the error.
B)  It is said to be self-correcting.
C)  It affects only income statement accounts.
D)  If affects only balance sheet accounts.
E)  Is immaterial for managerial decision making.F) A) and B)
G) A) and C)

Question 10

The cost of an inventory item includes the _____________,plus ______________ costs necessary to put it in a place and condition for sale.
answers must appear in this order

Accepted Answer

invoice price minus ...

Question 11

A company had beginning inventory of 10 units at a cost of $20 each on March 1.On March 2,it purchased 10 units at $22 each.On March 6 it purchased 6 units at $25 each.On March 8,it sold 22 units for $54 each.Using the FIFO perpetual inventory method,what was the cost of the 22 units sold?

Accepted Answer

A)  $470
B)  $490
C)  $450
D)  $570
E)  $520F) B) and E)
G) None of the above

Question 12

Ulrich had cost of goods sold of $6.7 million,ending inventory of $2.2 million,and average inventory of $1.9 million.Its days' sales in inventory equals:

Accepted Answer

A)  120.
B)  104.
C)  60.
D)  35.
E)  180.F) A) and B)
G) A) and E)

Question 13

Damaged and obsolete goods that can be sold:

Accepted Answer

A)  Are never counted as inventory.
B)  Are included in inventory at their full cost.
C)  Are included in inventory at their net realizable value.
D)  Should be disposed of immediately.
E)  Are assigned a value of zero.F) C) and D)
G) A) and C)

Question 14

Decisions management must make in accounting for inventory cost include all of the following except:

Accepted Answer

A)  Costing method.
B)  Perpetual or periodic inventory system.
C)  Customer demand for inventory.
D)  Use of market values or other estimates.
E)  Items included in inventory and their costs.F) C) and D)
G) All of the above

Question 15

A company normally sells its product for $20 per unit.However,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has now fallen to $13 per unit.What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?

Accepted Answer

A)  $1,000.
B)  $1,400.
C)  $400.
D)  $600.
E)  $800.F) A) and B)
G) A) and C)

Question 16

A company's normal selling price for its product is $20 per unit.However,due to market competition,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has fallen to $13 per unit.Calculate the value of this company's inventory at the lower of cost or market.

Accepted Answer

A)  $2,550.
B)  $2,600.
C)  $2,700.
D)  $3,000.
E)  $3,200.F) C) and D)
G) A) and C)

Question 17

Consignment goods are:

Accepted Answer

A)  Goods shipped by the owner to the consignee who sells the goods for the owner.
B)  Reported in the consignee's books as inventory.
C)  Goods shipped to the consignor who sells the goods for the owner.
D)  Not reported in the consignor's inventory since they do not have possession of the inventory.
E)  Always paid for by the consignee when they take possession.F) D) and E)
G) C) and D)

Question 18

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 11 units that were sold?

Accepted Answer

A)  $2,239.
B)  $2,255.
C)  $2,200.
D)  $2,228.
E)  $2,215.F) C) and D)
G) A) and B)

Question 19

Bedrock Company reported a December 31 ending inventory balance of $412,000.The following additional information is also available: ▪ The ending inventory balance of $412,000 included $72,000 of consigned inventory for which Bedrock was the consignor.
▪ The ending inventory balance of $412,000 included $22,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.
Based on this information,the correct balance for ending inventory on December 31 is:

Accepted Answer

A)  $412,000
B)  $340,000
C)  $318,000
D)  $362,000
E)  $390,000F) B) and C)
G) D) and E)

Question 20

An understatement of ending inventory will cause

Accepted Answer

A)  An overstatement of assets and equity on the balance sheet.
B)  An understatement of assets and equity on the balance sheet.
C)  An overstatement of assets and an understatement of equity on the balance sheet.
D)  An understatement of assets and an overstatement of equity on the balance sheet.
E)  No effect on the balance sheet.F) B) and E)
G) D) and E)

Exam 6: Inventories and Cost of Sales

Costs included in the Merchandise Inventory account can include all of the following except:

Correct Answer
verified

The ______________________ method of assigning costs to inventory and cost of goods sold assumes that the most recent purchases are sold first.

Correct Answer
verified
last in,fi...
View Answer

Correct Answer
verified

Damaged and obsolete goods that can be sold:

Correct Answer
verified

An understatement of ending inventory will cause

Correct Answer
verified

Jammer Company uses a weighted average perpetual inventory system and reports the following: What is the per-unit value of ending inventory on August 31?

Correct Answer
verified

An overstated beginning inventory will __ cost of goods sold and _ net income. answers must appear in this order

Correct Answer
verified
overstate ...
View Answer

Correct Answer
verified

If a period-end inventory amount is reported in error,it can cause a misstatement in all of the following except:

Correct Answer
verified

Since an error in the period-end inventory causes an offsetting error in the next period:

Correct Answer
verified

Correct Answer
verified

A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

Correct Answer
verified

Ulrich had cost of goods sold of $6.7 million,ending inventory of $2.2 million,and average inventory of $1.9 million.Its days' sales in inventory equals:

Correct Answer
verified

A company had beginning inventory of 10 units at a cost of $20 each on March 1.On March 2,it purchased 10 units at $22 each.On March 6 it purchased 6 units at $25 each.On March 8,it sold 22 units for $54 each.Using the FIFO perpetual inventory method,what was the cost of the 22 units sold?

Correct Answer
verified

Salmone Company reported the following purchases and sales of its only product.Salmone uses a perpetual inventory system.Determine the cost assigned to the ending inventory using FIFO.

Correct Answer
verified

Decisions management must make in accounting for inventory cost include all of the following except:

Correct Answer
verified

Consignment goods are:

Correct Answer
verified

Correct Answer
verified

The cost of an inventory item includes the _,plus __ costs necessary to put it in a place and condition for sale. answers must appear in this order

Correct Answer
verified
invoice price minus ...
View Answer

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 11 units that were sold?

Correct Answer
verified

Exam 6: Inventories and Cost of Sales

Costs included in the Merchandise Inventory account can include all of the following except:

Correct AnswerverifiedShow Answer

The ______________________ method of assigning costs to inventory and cost of goods sold assumes that the most recent purchases are sold first.

Correct Answerverifiedlast in,fi...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Damaged and obsolete goods that can be sold:

Correct AnswerverifiedShow Answer

An understatement of ending inventory will cause

Correct AnswerverifiedShow Answer

Jammer Company uses a weighted average perpetual inventory system and reports the following: What is the per-unit value of ending inventory on August 31?

Correct AnswerverifiedShow Answer

An overstated beginning inventory will ______________ cost of goods sold and _____________ net income. answers must appear in this order

Correct Answerverifiedoverstate ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

If a period-end inventory amount is reported in error,it can cause a misstatement in all of the following except:

Correct AnswerverifiedShow Answer

Since an error in the period-end inventory causes an offsetting error in the next period:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory.If the company uses the LIFO periodic inventory method,what would be the cost of the ending inventory?

Correct AnswerverifiedShow Answer

Ulrich had cost of goods sold of $6.7 million,ending inventory of $2.2 million,and average inventory of $1.9 million.Its days' sales in inventory equals:

Correct AnswerverifiedShow Answer

A company had beginning inventory of 10 units at a cost of $20 each on March 1.On March 2,it purchased 10 units at $22 each.On March 6 it purchased 6 units at $25 each.On March 8,it sold 22 units for $54 each.Using the FIFO perpetual inventory method,what was the cost of the 22 units sold?

Correct AnswerverifiedShow Answer

Salmone Company reported the following purchases and sales of its only product.Salmone uses a perpetual inventory system.Determine the cost assigned to the ending inventory using FIFO.

Correct AnswerverifiedShow Answer

Decisions management must make in accounting for inventory cost include all of the following except:

Correct AnswerverifiedShow Answer

Consignment goods are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The cost of an inventory item includes the _____________,plus ______________ costs necessary to put it in a place and condition for sale. answers must appear in this order

Correct Answerverifiedinvoice price minus ...View AnswerShow Answer

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 11 units that were sold?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
last in,fi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

An overstated beginning inventory will __ cost of goods sold and _ net income. answers must appear in this order

Correct Answer
verified
overstate ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The cost of an inventory item includes the _,plus __ costs necessary to put it in a place and condition for sale. answers must appear in this order

Correct Answer
verified
invoice price minus ...
View Answer

Correct Answer
verified