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Use the information above to answer the following question.Days to sell for 2014 is:


A) 91.25.
B) 94.3.
C) 88.16.
D) 182.5.

E) None of the above
F) A) and C)

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A

The following company buys and sells identical collectors' coin sets.The company uses LIFO.In the first two columns below,each coin set is identified by its letter and its cost.The third column indicates when coin sets were sold. For each inventory costing method given below,fill in the blanks to indicate the letter of the coin set which will be used to calculate either cost of goods sold or the cost of ending inventory.

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blured image PERIODIC INVENTORY: Inventory is taken ...

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The most commonly used inventory costing method in the U.S.is:


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

E) C) and D)
F) A) and C)

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Use the information above to answer the following question.Acme sells 150 units during the quarter.If Acme uses the weighted average method,what is its cost of goods sold for the quarter?


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

E) None of the above
F) A) and D)

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Which of the following is not true if excessive quantities of inventory are purchased?


A) Storage and interest costs may increase.
B) Goods might have to be sold at large discounts.
C) There is a greater probability that goods will become damaged or obsolete.
D) The inventory turnover ratio is likely to increase.

E) A) and B)
F) All of the above

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Use the information above to answer the following question.If the company uses the FIFO costing method,what is the cost of its ending inventory?


A) $1,494.
B) $2,290.
C) $2,580.
D) $2,706.

E) All of the above
F) C) and D)

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An increasing balance in the inventory account and a declining inventory turnover ratio implies that the inventory build up is occurring because:


A) goods are not selling as fast as they were in the past.
B) the company is expecting to sell more in the future.
C) goods are selling,but it is taking longer to collect payment.
D) goods cannot be shipped fast enough.

E) None of the above
F) B) and D)

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An error in the ending inventory one period causes an offsetting error in the next period,and as a result:


A) it affects only income statement accounts.
B) it affects only balance sheet accounts.
C) management can ignore the error.
D) it is a self-correcting or counter-balancing error.

E) A) and B)
F) B) and C)

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Which of the following would cause the greatest increase in a company's inventory turnover ratio?


A) Keeping the same amount of inventory on hand while unit sales are increasing.
B) Increasing the amount of inventory on hand while unit sales are increasing.
C) Keeping the same amount of inventory on hand while unit sales are decreasing.
D) Decreasing the amount of inventory on hand while unit sales are increasing.

E) C) and D)
F) B) and C)

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If a firm's beginning inventory is $35,000,goods purchased during the period cost $120,000,and the cost of goods sold for the period is $140,000,what is the amount of the ending inventory?


A) $45,000
B) $20,000
C) $25,000
D) $15,000

E) A) and C)
F) A) and B)

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D

A company's ability to pay its short-term obligations depends on many factors,including how quickly it sells its inventory.

A) True
B) False

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Which of the following companies would be least concerned about a low inventory turnover ratio?


A) A fish market selling fresh fish.
B) A hardware company selling drywall screws.
C) A dairy company selling butter and milk.
D) A semiconductor company selling microchips.

E) B) and D)
F) B) and C)

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B

On April 6,Lopez Co.purchased $5,000 of merchandise,terms 1/15,n/30.Lopez Co.paid for the purchase on April 26.The entry to record the payment on April 26 in a perpetual inventory system includes which of the following?


A) A credit to inventory for $50.
B) A debit to accounts payable for $4,900.
C) A credit to accounts payable for $5,000.
D) A credit to cash for $5,000.

E) A) and D)
F) All of the above

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Use the information above to answer the following question.BetterBuy records $3,000 as the cost of goods sold.BetterBuy is using the:


A) Specific identification method.
B) LIFO method.
C) FIFO method.
D) Weighted average cost method.

E) A) and C)
F) B) and D)

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Given the following information for Maynor Company in 2014,calculate the company's ending inventory and cost of goods sold using the following inventory costing methods,assuming the company uses a perpetual inventory system: a)Weighted Average b)FIFO c)LIFO Given the following information for Maynor Company in 2014,calculate the company's ending inventory and cost of goods sold using the following inventory costing methods,assuming the company uses a perpetual inventory system: a)Weighted Average b)FIFO c)LIFO

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Weighted Average: CGS: $1,600 + $1,408 =...

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A company using a perpetual inventory system made the following entry: A company using a perpetual inventory system made the following entry: What does this entry reflect? A) A purchase of inventory at a discount. B) A return of inventory for credit. C) A sale of inventory on account. D) A payment within the discount period for inventory previously purchased on credit. What does this entry reflect?


A) A purchase of inventory at a discount.
B) A return of inventory for credit.
C) A sale of inventory on account.
D) A payment within the discount period for inventory previously purchased on credit.

E) C) and D)
F) B) and C)

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In a period of rising prices,the inventory costing method that will cause the company to have the lowest income taxes is


A) LIFO.
B) FIFO.
C) Weighted average.
D) Specific identification.

E) B) and D)
F) None of the above

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In applying the lower of cost or market method to inventory,market is defined as


A) historical cost.
B) current replacement cost.
C) current sales price.
D) weighted-average cost.

E) A) and B)
F) B) and D)

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Alphabet Company buys different letters for resale.It buys A thru G on January 1 at $4 per letter,and sells A and E on January 15.On February 1,it buys H thru L at $6 per letter and sells D,H and J on February 9.It then buys M thru R on March 1 at $7 per letter and sells N on March 19.If the company uses the LIFO method on a perpetual basis,what is the cost of its ending inventory (rounded to the nearest dollar) ?


A) $58
B) $67
C) $72
D) $76

E) A) and C)
F) C) and D)

Correct Answer

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Use the information above to answer the following question.The inventory turnover ratio is closest to:


A) 12.5.
B) 13.4.
C) 14.7.
D) 2.2.

E) A) and D)
F) B) and C)

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