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Exam 6: Inventories

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Question 41

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One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

A) True
B) False

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Question 42

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During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

A) True
B) False

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Question 43

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Complete the following table using the perpetual LIFO method of inventory flow.

Use the information below to answer the following questions.The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. -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.

If a company values inventory at the lower of cost or market, which of the following is the value of inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole.

The number of days' sales in inventory measures

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

Which of the following will be the same amount regardless of the cost flow assumption adopted?

Beginning inventory, purchases, and sales data for hammers are as follows: Assuming the business maintains a perpetual inventory system, complete the inventory cards and calculate the cost of goods sold and ending inventory under the following assumptions: (a) First-in, first-out (b) Last-in, first-out

On the basis of the following data, what is the value of the total inventory at the lower of cost or market. Apply lower of cost or market to each inventory item.

Control of inventory should begin as soon as the inventory is received. Which of the following internal control steps is not done to meet this goal?

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Use this information to answer the questions that follow. -If Addison uses FIFO, the September 30 inventory is

Match each description to the appropriate document used for inventory control (a-c). -establishes an initial record of the receipt of inventory A)Receiving report B)Vendor's invoice C)Purchase order

Assume that three identical units of merchandise are purchased during October, as follows: Assume one unit is sold on October 31 for $28. Determine cost of goods sold, gross profit, and ending inventory under the FIFO method.

Beginning inventory, purchases, and sales for an inventory item are as follows: The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to FIFO?

The following lots of a Commodity P were available for sale during the year. Use this information to answer the questions that follow.​ Beginning inventory 5 units at $61 First purchase 15 units at $63 Second purchase 10 units at $74 Third purchase 10 units at $77 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. -What is the year-end inventory balance using the average cost method? Use the information provided in the table to answer this question

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO.

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the gross profit for March using FIFO?

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

During periods of rapidly rising costs, the use of the LIFO method results in illusory or inventory profits.