Question 1

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term placing the letter designating the term in the space provided.
Terms:
-_____ Cost of inventory sold during the period.

Accepted Answer

A)  Ending inventory
B)  Freight-in
C)  Cost of goods sold
D)  LIFO conformity rule
E)  LIFOF) Freight-outG) LIFO reserveH) Specific identificationI) FIFOJ) Average costK) G) and J)
L) B) and E)

Question 2

Good, Inc. sold inventory for $1,200 that was purchased for $700. Good records which of the following when it sells inventory using a perpetual inventory system?

Accepted Answer

A)   No entry is required for cost of goods sold and inventory.
B)   Debit Cost of Goods Sold $700; credit Inventory $700.
C)   Debit Cost of Goods Sold $1,200; credit Inventory $1,200.
D)   Debit Inventory $700; credit Cost of Goods Sold $700.E) A) and B)
F) B) and C)

Question 3

When inventory costs are rising, __________ generally results in a higher amount of reported net income.

Accepted Answer

The answer of When inventory costs are rising, __________ generally...

Question 4

Baker Fine Foods has beginning inventory for the year of $12,000. During the year, Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory. Baker will report cost of goods sold equal to:

Accepted Answer

A)   $150,000.
B)   $158,000.
C)   $142,000.
D)   $170,000.E) A) and B)
F) All of the above

Question 5

The following information pertains to Julia & Company: March 1 Beginning inventory  =30= 30=30  units  @$5@ \$ 5@$5 
March3 Purchased15 units@\$4
March 9 Sold 25 units  @$8@ \$ 8@$8  What's the ending balance of inventory for Julia & Company assuming that it uses FIFO?

Accepted Answer

A)   $125
B)   $100
C)   $110
D)   $85 E) None of the above
F) A) and B)

Question 6

The LIFO conformity rule requires a company that uses LIFO for tax reporting to use FIFO for financial reporting.

Accepted Answer

A) True 
 B)False

Question 7

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term placing the letter designating the term in the space provided.
Terms:
-_____ Cost flow assumption that assumes last units purchased are sold first.

Accepted Answer

A)  Ending inventory
B)  Freight-in
C)  Cost of goods sold
D)  LIFO conformity rule
E)  LIFOF) Freight-outG) LIFO reserveH) Specific identificationI) FIFOJ) Average costK) B) and D)
L) E) and J)

Question 8

During periods of rising costs, FIFO generally results in a higher ending inventory balance.

Accepted Answer

A) True 
 B)False

Question 9

Overstating ending inventory in the current year causes net income in the current year to be overstated.

Accepted Answer

A) True 
 B)False

Question 10

Cost of goods sold equals:

Accepted Answer

A)   Beginning inventory - net purchases + ending inventory.
B)   Beginning inventory + accounts payable - net purchases.
C)   Net purchases + ending inventory - beginning inventory.
D)   Beginning inventory + net purchases - ending inventory.E) B) and C)
F) A) and D)

Question 11

In a perpetual inventory system, the purchase of inventory is debited to:

Accepted Answer

A)   Purchases.
B)   Cost of Goods Sold.
C)   Inventory.
D)   Accounts Payable.E) None of the above
F) C) and D)

Question 12

Listed below are four terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term placing the letter designating the term in the space provided.
Terms:
-_____ Requires a year-end adjustment for inventory.

Accepted Answer

A)  FOB shipping point
B)  FOB destination
C)  Periodic inventory system
D)  Perpetual inventory systemE) None of the above
F) A) and B)

Question 13

The following information pertains to Julia & Company: March 1 Beginning inventory  =30= 30=30  units  @$5@ \$ 5@$5 
March 3 Purchased15 units @ \$4
March 9 Sold 25 units  @$8@ \$ 8@$8  What is the cost of goods sold for Julia & Company assuming it uses LIFO?

Accepted Answer

A)   $125.
B)   $100.
C)   $110.
D)   $85. E) B) and C)
F) None of the above

Question 14

Using the weighted-average cost method, the average cost of inventory is calculated as the average unit cost of inventory purchased during the year.

Accepted Answer

A) True 
 B)False

Question 15

A company overstated its ending inventory balance by $6,000 in 2012. What impact will this error have on cost of goods sold and gross profit in 2012 and 2013?

Accepted Answer

2012
Cost of goods sold is und...

Question 16

Bill Inc.'s correct ending balance for the inventory account at the end of 2012 should be $5,000, but the company incorrectly stated it as $3,000. In 2013, Bill correctly recorded its ending balance of the inventory account. Which one of the following is true?

Accepted Answer

A)   Gross profit is overstated by $2,000 in 2012.
B)   Retained earnings are understated by $2,000 in 2013.
C)   Gross profit is overstated by $2,000 in 2013.
D)   Cost of goods sold is understated by $2,000 in 2012.E) A) and B)
F) All of the above

Question 17

The gross profit ratio measures the amount by which the sale price of inventory exceeds its cost per dollar of sales.

Accepted Answer

A) True 
 B)False

Question 18

The following information relates to inventory for Shoeless Joe Inc.   Date  Quantity ‾ Price ‾ March 1  Beginning Inventory 20$2 March 7  Purchase 153 March 11  Sale 257 March 12  Purchase 204\begin{array} { l l c c } 	ext { Date } & & \underline { 	ext { Quantity } } & \underline { 	ext { Price } } \	ext { March 1 } & 	ext { Beginning Inventory } & 20 & \$ 2 \	ext { March 7 } & 	ext { Purchase } & 15 & 3 \	ext { March 11 } & 	ext { Sale } & 25 & 7 \	ext { March 12 } & 	ext { Purchase } & 20 & 4\end{array} Date  March 1  March 7  March 11  March 12 ​ Beginning Inventory  Purchase  Sale  Purchase ​ Quantity ​20152520​ Price ​$2374​  At what amount would Shoeless report gross profit using LIFO cost flow assumptions?

Accepted Answer

A)   $105.
B)   $80.
C)   $175.
D)   $120. E) C) and D)
F) All of the above

Question 19

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term placing the letter designating the term in the space provided.
Terms:
-_____ Companies that purchase inventories that are primarily in finished form for resale to customers.

Accepted Answer

A)  Work-in-process inventory
B)  Merchandising companies
C)  Finished goods
D)  Raw materials
E)  Manufacturing companiesF) All of the above
G) A) and C)

Question 20

For most companies, actual physical flow of their inventory follows LIFO.

Accepted Answer

A) True 
 B)False

Exam 6: Inventory and Cost of Goods Sold

Baker Fine Foods has beginning inventory for the year of $12,000. During the year, Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory. Baker will report cost of goods sold equal to:

Correct Answer
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The gross profit ratio measures the amount by which the sale price of inventory exceeds its cost per dollar of sales.

Correct Answer
verified

Bill Inc.'s correct ending balance for the inventory account at the end of 2012 should be $5,000, but the company incorrectly stated it as $3,000. In 2013, Bill correctly recorded its ending balance of the inventory account. Which one of the following is true?

Correct Answer
verified

In a perpetual inventory system, the purchase of inventory is debited to:

Correct Answer
verified

For most companies, actual physical flow of their inventory follows LIFO.

Correct Answer
verified

Overstating ending inventory in the current year causes net income in the current year to be overstated.

Correct Answer
verified

Cost of goods sold equals:

Correct Answer
verified

During periods of rising costs, FIFO generally results in a higher ending inventory balance.

Correct Answer
verified

Good, Inc. sold inventory for $1,200 that was purchased for $700. Good records which of the following when it sells inventory using a perpetual inventory system?

Correct Answer
verified

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term placing the letter designating the term in the space provided. Terms: -_____ Cost flow assumption that assumes last units purchased are sold first.

Correct Answer
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Correct Answer
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Correct Answer
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Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term placing the letter designating the term in the space provided. Terms: -_____ Cost of inventory sold during the period.

Correct Answer
verified

When inventory costs are rising, __________ generally results in a higher amount of reported net income.

Correct Answer
verified

The LIFO conformity rule requires a company that uses LIFO for tax reporting to use FIFO for financial reporting.

Correct Answer
verified

A company overstated its ending inventory balance by $6,000 in 2012. What impact will this error have on cost of goods sold and gross profit in 2012 and 2013?

Correct Answer
verified
2012
Cost of goods sold is und...
View Answer

The following information pertains to Julia & Company: March 1 Beginning inventory $= 30$ units $@ \$ 5$ March3 Purchased15 units@\$4 March 9 Sold 25 units $@ \$ 8$ What's the ending balance of inventory for Julia & Company assuming that it uses FIFO?

Correct Answer
verified

The following information pertains to Julia & Company: March 1 Beginning inventory $= 30$ units $@ \$ 5$ March 3 Purchased15 units @ \$4 March 9 Sold 25 units $@ \$ 8$ What is the cost of goods sold for Julia & Company assuming it uses LIFO?

Correct Answer
verified

Using the weighted-average cost method, the average cost of inventory is calculated as the average unit cost of inventory purchased during the year.

Correct Answer
verified

Listed below are four terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term placing the letter designating the term in the space provided. Terms: -_____ Requires a year-end adjustment for inventory.

Correct Answer
verified

Exam 6: Inventory and Cost of Goods Sold

Baker Fine Foods has beginning inventory for the year of $12,000. During the year, Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory. Baker will report cost of goods sold equal to:

Correct AnswerverifiedShow Answer

The gross profit ratio measures the amount by which the sale price of inventory exceeds its cost per dollar of sales.

Correct AnswerverifiedShow Answer

Bill Inc.'s correct ending balance for the inventory account at the end of 2012 should be $5,000, but the company incorrectly stated it as $3,000. In 2013, Bill correctly recorded its ending balance of the inventory account. Which one of the following is true?

Correct AnswerverifiedShow Answer

In a perpetual inventory system, the purchase of inventory is debited to:

Correct AnswerverifiedShow Answer

For most companies, actual physical flow of their inventory follows LIFO.

Correct AnswerverifiedShow Answer

Overstating ending inventory in the current year causes net income in the current year to be overstated.

Correct AnswerverifiedShow Answer

Cost of goods sold equals:

Correct AnswerverifiedShow Answer

During periods of rising costs, FIFO generally results in a higher ending inventory balance.

Correct AnswerverifiedShow Answer

Good, Inc. sold inventory for $1,200 that was purchased for $700. Good records which of the following when it sells inventory using a perpetual inventory system?

Correct AnswerverifiedShow Answer

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term placing the letter designating the term in the space provided. Terms: -_____ Cost flow assumption that assumes last units purchased are sold first.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term placing the letter designating the term in the space provided. Terms: -_____ Cost of inventory sold during the period.

Correct AnswerverifiedShow Answer

When inventory costs are rising, __________ generally results in a higher amount of reported net income.

Correct AnswerverifiedShow Answer

The LIFO conformity rule requires a company that uses LIFO for tax reporting to use FIFO for financial reporting.

Correct AnswerverifiedShow Answer

A company overstated its ending inventory balance by $6,000 in 2012. What impact will this error have on cost of goods sold and gross profit in 2012 and 2013?

Correct Answerverified2012Cost of goods sold is und...View AnswerShow Answer

The following information pertains to Julia & Company: March 1 Beginning inventory =30= 30=30 units @$5@ \$ 5@$5 March3 Purchased15 units@\$4 March 9 Sold 25 units @$8@ \$ 8@$8 What's the ending balance of inventory for Julia & Company assuming that it uses FIFO?

Correct AnswerverifiedShow Answer

The following information pertains to Julia & Company: March 1 Beginning inventory =30= 30=30 units @$5@ \$ 5@$5 March 3 Purchased15 units @ \$4 March 9 Sold 25 units @$8@ \$ 8@$8 What is the cost of goods sold for Julia & Company assuming it uses LIFO?

Correct AnswerverifiedShow Answer

Using the weighted-average cost method, the average cost of inventory is calculated as the average unit cost of inventory purchased during the year.

Correct AnswerverifiedShow Answer

Listed below are four terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term placing the letter designating the term in the space provided. Terms: -_____ Requires a year-end adjustment for inventory.

Correct AnswerverifiedShow Answer

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2012
Cost of goods sold is und...
View Answer

The following information pertains to Julia & Company: March 1 Beginning inventory $= 30$ units $@ \$ 5$ March3 Purchased15 units@\$4 March 9 Sold 25 units $@ \$ 8$ What's the ending balance of inventory for Julia & Company assuming that it uses FIFO?

Correct Answer
verified

The following information pertains to Julia & Company: March 1 Beginning inventory $= 30$ units $@ \$ 5$ March 3 Purchased15 units @ \$4 March 9 Sold 25 units $@ \$ 8$ What is the cost of goods sold for Julia & Company assuming it uses LIFO?

Correct Answer
verified

Correct Answer
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Correct Answer
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