Question 1

Match each description to the appropriate cost flow assumption (a-d) .
-The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

Accepted Answer

A)  Weighted average
B)  First-in, first-out (FIFO) 
C)  Last-in, first-out (LIFO) 
D)  Specific identificationE) A) and B)
F) None of the above

Question 2

Use the information below to answer the following questions.
The following lots of a particular commodity were available for sale during the year:
   Beginning inventory 10 units at $60 First purchase 25 units at $65 Second purchase 30 units at $68 Third purchase 15 units at $75\begin{array}{ll}	ext { Beginning inventory } & 10 	ext { units at } \$ 60 \	ext { First purchase } & 25 	ext { units at } \$ 65 \	ext { Second purchase } & 30 	ext { units at } \$ 68 \	ext { Third purchase } & 15 	ext { units at } \$ 75\end{array} Beginning inventory  First purchase  Second purchase  Third purchase ​10 units at $6025 units at $6530 units at $6815 units at $75​  The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year.
-What is the amount of inventory at the end of the year using the LIFO method??

Accepted Answer

A)   $1,685
B)   $1,575
C)   $1,805
D)   $3,815 E) A) and C)
F) A) and B)

Question 3

Determine the total value of the merchandise using net realizable value.   Item  Quantity  Selling Price  Commission  Doll 10$7$2 Horse 593\begin{array} { | l | c | c | c | } \hline  { 	ext { Item } } & 	ext { Quantity } & 	ext { Selling Price } & 	ext { Commission } \\hline 	ext { Doll } & 10 & \$ 7 & \$ 2 \\hline 	ext { Horse } & 5 & 9 & 3 \\hline\end{array} Item  Doll  Horse ​ Quantity 105​ Selling Price $79​ Commission $23​​

Accepted Answer

A)   $35
B)   $80
C)   $115
D)   $25 E) A) and B)
F) A) and C)

Question 4

When using the FIFO inventory costing method, the most recent costs are assigned to the cost of merchandise sold.

Accepted Answer

A) True 
 B)False

Question 5

The method of estimating inventory that uses records of the selling prices of the merchandise is called the

Accepted Answer

A)   retail method
B)   gross profit method
C)   inventory turnover method
D)   average cost methodE) None of the above
F) A) and C)

Question 6

If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect its bottom line?

Accepted Answer

A)   There will be no change to net income.
B)   Net income will be overstated.
C)   Net income will be understated.
D)   Only gross profit will be affected.E) B) and C)
F) A) and D)

Question 7

Beginning inventory, purchases, and sales data for widgets are as follows:? $$\begin{array} { | r | r | l | r | l | r | r | } 
\hline & \text { Apr. } 3 & \text { Inventory } & & 15 \text { units } & @ & \$ 30 \
\hline &11 & \text { Purchase } & & 12 \text { units } & @ & \$ 27 \
\hline & 14 & \text { Sale } & & 18 \text { units } & & \
\hline &21 & \text { Purchase } & & 7 \text { units } & @ & \$ 25 \
\hline &25 & \text { Sale } & & 10 \text { units } & & \
\hline
\end{array}$$ 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 8

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

Exam 7: Inventories

Correct Answer
verified

When using the FIFO inventory costing method, the most recent costs are assigned to the cost of merchandise sold.

Correct Answer
verified

If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect its bottom line?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

The method of estimating inventory that uses records of the selling prices of the merchandise is called the

Correct Answer
verified

Match each description to the appropriate cost flow assumption (a-d) . -The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

Correct Answer
verified

Exam 7: Inventories

Correct AnswerverifiedShow Answer

When using the FIFO inventory costing method, the most recent costs are assigned to the cost of merchandise sold.

Correct AnswerverifiedShow Answer

If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect its bottom line?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The method of estimating inventory that uses records of the selling prices of the merchandise is called the

Correct AnswerverifiedShow Answer

Match each description to the appropriate cost flow assumption (a-d) . -The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

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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