Question 1

Angus Company agreed to sell goods for Longhorn Company on consignment,but wasn't willing to take ownership of the goods in case they were difficult to sell.Which of the following statements is true?

Accepted Answer

A)  Angus owns the inventory and should report it on its balance sheet.
B)  Longhorn owns the inventory,but should not report it on its balance sheet because Angus actually holds the inventory.
C)  Angus owns the inventory,since possession is nineteenths of the law,but should not report it on its balance sheet.
D)  Longhorn owns the inventory and should report it on its balance sheet.

Question 2

Match the term to the appropriate definition.There are more definitions than terms.
-Days to Sell

Accepted Answer

A)  Inventory costing method that uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.
B)  The inventory that starts the manufacturing process.
C)  Inventory costing method that assumes that the costs of the last goods purchased are the costs of the first goods sold.
D)  Beginning Inventory + Purchases - Ending Inventory
E)  Inventory costing method that identifies the cost of the specific item that was sold.F) A valuation rule that requires Inventory to be written down when its market value falls below its cost.G) Goods that are held for sale in the normal course of business or are used to produce other goods for sale.H) The difference between net sales and cost of goods sold.I) Inventory that was in process and now is completed and ready for sale.J) Beginning Inventory + Purchases - Cost of Goods SoldK) Requires that if LIFO is used on the income tax return,it also must be used in financial statement reporting.L) Goods that are in the process of being manufactured.M) The expense that follows directly after Net Sales on a multiple step income statement.N) Consists of products acquired in a finished condition,ready for sale without further processing.O) Inventory costing method that assumes that the costs of the first goods purchased are the costs of the first goods sold.P) A measure of the average number of days from the time inventory is bought to the time it is sold.Q) Inventory items being transported.R) Goods a company is holding on behalf of the goods' owner.S) How many times (on average) that inventory has been bought or sold.

Question 3

Match the term to the appropriate definition.There are more definitions than terms.
-LIFO Conformity Rule

Accepted Answer

A)  Inventory costing method that uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.
B)  The inventory that starts the manufacturing process.
C)  Inventory costing method that assumes that the costs of the last goods purchased are the costs of the first goods sold.
D)  Beginning Inventory + Purchases - Ending Inventory
E)  Inventory costing method that identifies the cost of the specific item that was sold.F) A valuation rule that requires Inventory to be written down when its market value falls below its cost.G) Goods that are held for sale in the normal course of business or are used to produce other goods for sale.H) The difference between net sales and cost of goods sold.I) Inventory that was in process and now is completed and ready for sale.J) Beginning Inventory + Purchases - Cost of Goods SoldK) Requires that if LIFO is used on the income tax return,it also must be used in financial statement reporting.L) Goods that are in the process of being manufactured.M) The expense that follows directly after Net Sales on a multiple step income statement.N) Consists of products acquired in a finished condition,ready for sale without further processing.O) Inventory costing method that assumes that the costs of the first goods purchased are the costs of the first goods sold.P) A measure of the average number of days from the time inventory is bought to the time it is sold.Q) Inventory items being transported.R) Goods a company is holding on behalf of the goods' owner.S) How many times (on average) that inventory has been bought or sold.

Question 4

Consider the following information for Maynor Company,which uses a perpetual inventory system:
  The company sold 25 units on May 1 and 20 units on October 28.
Required:
Calculate the company's ending inventory and cost of goods sold using the each of following inventory costing methods.
a.FIFO
b.LIFO
c.Weighted Average

Accepted Answer

a.

Cost of Goods Sold:$1,59...

Question 5

In each accounting period,a manager can select the inventory costing method that yields the highest net income.

Accepted Answer

A) True 
 B)False

Question 6

The Xu Corporation uses a periodic inventory system.The company has a beginning inventory of 300 units at $5 each on January 1.Xu purchases 500 units at $4 each in February and 200 units at $6 each in March.There were no additional purchases or sales during the remainder of the year. Xu sells 150 units during the quarter.If Xu uses the weighted average method,what is its cost of goods sold?

Accepted Answer

A)  $600
B)  $705
C)  $750
D)  $900

Question 7

When the lower of cost or market rule/net realizable value requires an inventory adjustment,the:

Accepted Answer

A)  adjustment usually,but not always,reduces the book value of inventory.
B)  write-down is usually reported as a part of cost of goods sold.
C)  inventory adjustment is recorded in a contra-account called Inventory Allowances.
D)  write-down does not affect any of the financial statements.

Question 8

When costs to purchase inventory are increasing over time,using FIFO leads to reporting ________ cost of goods sold and ________ net income than LIFO.

Accepted Answer

A)  lower,lower
B)  higher;higher
C)  lower;higher
D)  higher;lower

Question 9

Eaton Electronics uses a periodic inventory system.On March 31,Eaton has two plasma TVs on hand at a cost of $1,500 each (serial numbers 11534892 and 11534894) .In April,the company purchases four more identical TVs from Toshiba for $1,450 each (serial numbers 11542631 through 11542634) .In May,the company purchases five more identical TVs for $1,600 each (serial numbers 11550964 through 11550968) .In June,Eaton sells two of these TVs (serial numbers 11534894 and 11542631) .There were no additional purchases or sales during the remainder of the year. Eaton Electronics reports $3,000 as the cost of goods sold.Eaton Electronics is using the:

Accepted Answer

A)  specific identification method.
B)  LIFO method.
C)  FIFO method.
D)  weighted average cost method.

Question 10

AAA Co.uses a periodic inventory system and has the following information in regard to its inventory:  There are 500 units in ending inventory.What is the amount of the ending inventory using the FIFO method?

Accepted Answer

A)  $3,000
B)  $7,200
C)  $7,800
D)  $8,900

Question 11

Match the term to the appropriate definition.There are more definitions than terms.
-Weighted Average Cost

Accepted Answer

A)  Inventory costing method that uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.
B)  The inventory that starts the manufacturing process.
C)  Inventory costing method that assumes that the costs of the last goods purchased are the costs of the first goods sold.
D)  Beginning Inventory + Purchases - Ending Inventory
E)  Inventory costing method that identifies the cost of the specific item that was sold.F) A valuation rule that requires Inventory to be written down when its market value falls below its cost.G) Goods that are held for sale in the normal course of business or are used to produce other goods for sale.H) The difference between net sales and cost of goods sold.I) Inventory that was in process and now is completed and ready for sale.J) Beginning Inventory + Purchases - Cost of Goods SoldK) Requires that if LIFO is used on the income tax return,it also must be used in financial statement reporting.L) Goods that are in the process of being manufactured.M) The expense that follows directly after Net Sales on a multiple step income statement.N) Consists of products acquired in a finished condition,ready for sale without further processing.O) Inventory costing method that assumes that the costs of the first goods purchased are the costs of the first goods sold.P) A measure of the average number of days from the time inventory is bought to the time it is sold.Q) Inventory items being transported.R) Goods a company is holding on behalf of the goods' owner.S) How many times (on average) that inventory has been bought or sold.

Question 12

Sugar,Inc.sells $938,600 of goods during the year that have a cost of $797,200.Inventory was $59,566 at the beginning of the year and $68,076 at the end of the year. How long on average does it take to sell something from inventory after it is purchased?

Accepted Answer

A)  12.5 days
B)  24.8 days
C)  29.2 days
D)  165.9 days

Question 13

Match the term to the appropriate definition.There are more definitions than terms.
-Gross Profit

Accepted Answer

A)  Inventory costing method that identifies the cost of the specific item that was sold.
B)  Inventory costing method that assumes that the costs of the first goods purchased are the costs of the first goods sold.
C)  The difference between net sales and cost of goods sold.
D)  The inventory that starts the manufacturing process.
E)  Inventory items being transported.F) Consists of products acquired in a finished condition,ready for sale without further processing.G) A valuation rule that requires Inventory to be written down when its market value falls below its cost.H) The expense that follows directly after Net Sales on a multiple step income statement.I) Beginning Inventory + Purchases - Cost of Goods SoldJ) Goods a company is holding on behalf of the goods' owner.K) Inventory costing method that assumes that the costs of the last goods purchased are the costs of the first goods sold.L) Requires that if LIFO is used on the income tax return,it also must be used in financial statement reporting.M) Beginning Inventory + Purchases - Ending InventoryN) Goods that are in the process of being manufactured.O) Inventory costing method that uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.P) Goods that are held for sale in the normal course of business or are used to produce other goods for sale.Q) How many times (on average) that inventory has been bought or sold.R) Inventory that was in process and now is completed and ready for sale.S) A measure of the average number of days from the time inventory is bought to the time it is sold.

Question 14

Merle Industries had been selling its product for $40 per unit,but recently lowered the selling price to $30 per unit.The company's current inventory consists of 200 units purchased at $32 per unit.The market value of this inventory is currently $26 per unit.At what amount should the company's inventory be reported on the balance sheet?

Accepted Answer

A)  $5,200
B)  $6,400
C)  $6,000
D)  $8,000

Question 15

Cost of goods sold = Beginning inventory + Purchases − Ending inventory

Accepted Answer

A) True 
 B)False

Question 16

Consider the following information for Maynor Company,which uses a periodic inventory system:
  The company sold 25 units on May 1 and 20 units on October 28.
Required:
Calculate the company's ending inventory and cost of goods sold using the each of following inventory costing methods.(Round the per unit cost to 2 decimal places and then round your answers to the nearest whole dollar. )
a.FIFO
b.LIFO
c.Weighted Average

Accepted Answer

a.

Cost of Goods Sold:$1,59...

Question 17

A company uses a weighted-average perpetual inventory system.The following transactions took place during the month of November:   November 15 units were purchased at $6.00 per unit  November 1210 units were purchased at $7.50 per unit  November 147 units were sold for $14.00 per unit  November 2412 units were purchased at $10.00 per unit \begin{array}{|l|l|}\hline 	ext { November } 1 & 5 	ext { units were purchased at } \$ 6.00 	ext { per unit } \\hline 	ext { November } 12 & 10 	ext { units were purchased at } \$ 7.50 	ext { per unit } \\hline 	ext { November } 14 & 7 	ext { units were sold for } \$ 14.00 	ext { per unit } \\hline 	ext { November } 24 & 12 	ext { units were purchased at } \$ 10.00 	ext { per unit } \\hline\end{array} November 1 November 12 November 14 November 24​5 units were purchased at $6.00 per unit 10 units were purchased at $7.50 per unit 7 units were sold for $14.00 per unit 12 units were purchased at $10.00 per unit ​​  What is the per-unit value of ending inventory on November 30 if this company uses a weighted-average perpetual inventory system? (Round each per unit cost to 2 decimal places. )

Accepted Answer

A)  $6.00
B)  $7.00
C)  $8.80
D)  $13.00

Question 18

Which of the following actions would most likely cause the inventory turnover ratio to increase?

Accepted Answer

A)  Increasing the average inventory kept on hand.
B)  Maintaining the same average inventory kept on hand and increasing the volume of sales.
C)  Increasing the average inventory kept on hand and increasing the volume of sales.
D)  Maintaining the same average inventory kept on hand and decreasing the volume of sales.

Question 19

Lexington Company updates its inventory periodically.The company's beginning inventory was $1,000 and purchases were $5,000 during the year.The company's ending inventory count was $2,000.What was the amount of its cost of goods sold?

Accepted Answer

A)  $6,000
B)  $4,000
C)  $8,000
D)  $2,000

Question 20

Goods in transit are:

Accepted Answer

A)  inventory items being transported from a seller to a buyer.
B)  always included in the transportation company's inventory.
C)  always included in the selling company's inventory.
D)  always included in the buying company's inventory.

Exam 7: Inventory and Cost of Goods Sold

Cost of goods sold = Beginning inventory + Purchases − Ending inventory

Correct Answer
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Correct Answer
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a.

Cost of Goods Sold:$1,59...
View Answer

Match the term to the appropriate definition.There are more definitions than terms. -Weighted Average Cost

Correct Answer
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Correct Answer
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Which of the following actions would most likely cause the inventory turnover ratio to increase?

Correct Answer
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In each accounting period,a manager can select the inventory costing method that yields the highest net income.

Correct Answer
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Correct Answer
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Correct Answer
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Match the term to the appropriate definition.There are more definitions than terms. -Days to Sell

Correct Answer
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Correct Answer
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a.

Cost of Goods Sold:$1,59...
View Answer

Match the term to the appropriate definition.There are more definitions than terms. -Gross Profit

Correct Answer
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Match the term to the appropriate definition.There are more definitions than terms. -LIFO Conformity Rule

Correct Answer
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When costs to purchase inventory are increasing over time,using FIFO leads to reporting cost of goods sold and net income than LIFO.

Correct Answer
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Goods in transit are:

Correct Answer
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Sugar,Inc.sells $938,600 of goods during the year that have a cost of $797,200.Inventory was $59,566 at the beginning of the year and $68,076 at the end of the year. How long on average does it take to sell something from inventory after it is purchased?

Correct Answer
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Correct Answer
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When the lower of cost or market rule/net realizable value requires an inventory adjustment,the:

Correct Answer
verified

Lexington Company updates its inventory periodically.The company's beginning inventory was $1,000 and purchases were $5,000 during the year.The company's ending inventory count was $2,000.What was the amount of its cost of goods sold?

Correct Answer
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Angus Company agreed to sell goods for Longhorn Company on consignment,but wasn't willing to take ownership of the goods in case they were difficult to sell.Which of the following statements is true?

Correct Answer
verified

AAA Co.uses a periodic inventory system and has the following information in regard to its inventory: There are 500 units in ending inventory.What is the amount of the ending inventory using the FIFO method?

Correct Answer
verified

Exam 7: Inventory and Cost of Goods Sold

Cost of goods sold = Beginning inventory + Purchases − Ending inventory

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Cost of Goods Sold:$1,59...View AnswerShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -Weighted Average Cost

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following actions would most likely cause the inventory turnover ratio to increase?

Correct AnswerverifiedShow Answer

In each accounting period,a manager can select the inventory costing method that yields the highest net income.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -Days to Sell

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Cost of Goods Sold:$1,59...View AnswerShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -Gross Profit

Correct AnswerverifiedShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -LIFO Conformity Rule

Correct AnswerverifiedShow Answer

When costs to purchase inventory are increasing over time,using FIFO leads to reporting ________ cost of goods sold and ________ net income than LIFO.

Correct AnswerverifiedShow Answer

Goods in transit are:

Correct AnswerverifiedShow Answer

Sugar,Inc.sells $938,600 of goods during the year that have a cost of $797,200.Inventory was $59,566 at the beginning of the year and $68,076 at the end of the year. How long on average does it take to sell something from inventory after it is purchased?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When the lower of cost or market rule/net realizable value requires an inventory adjustment,the:

Correct AnswerverifiedShow Answer

Lexington Company updates its inventory periodically.The company's beginning inventory was $1,000 and purchases were $5,000 during the year.The company's ending inventory count was $2,000.What was the amount of its cost of goods sold?

Correct AnswerverifiedShow Answer

Angus Company agreed to sell goods for Longhorn Company on consignment,but wasn't willing to take ownership of the goods in case they were difficult to sell.Which of the following statements is true?

Correct AnswerverifiedShow Answer

AAA Co.uses a periodic inventory system and has the following information in regard to its inventory: There are 500 units in ending inventory.What is the amount of the ending inventory using the FIFO method?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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a.

Cost of Goods Sold:$1,59...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a.

Cost of Goods Sold:$1,59...
View Answer

Correct Answer
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Correct Answer
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When costs to purchase inventory are increasing over time,using FIFO leads to reporting cost of goods sold and net income than LIFO.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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