FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Inventories

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

True/False

Review LaterAdd Note

Review Later

FIFO is the inventory costing method that follows the physical flow of the goods.

A) True
B) False

Correct Answer

verified

Show Answer

Question 32

True/False

Review LaterAdd Note

Review Later

Safeguarding inventory and proper reporting of the inventory in the books are the reasons for controlling the inventory.

A) True
B) False

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

Ending inventory is made up of the oldest purchases when a company uses

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:

The following units of an inventory item were available for sale during the year: $\begin{array}{ll}\text { Beginning inventory } & 10 \text { units at } \$ 55 \\\text { First purchase } & 25 \text { units at } \$ 60 \\\text { Second purchase } & 30 \text { units at } \$ 65 \\\text { Third purchase } & 15 \text { units at } \$ 70\end{array}$ The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The value of ending inventory using LIFO is:

The lower of cost or market is a method of inventory valuation.

Which of the following measures the length of time it takes to acquire, sell and replace inventory?

Merchandise inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error?

Cost flow is in the order in which costs were incurred when using

The units of an item available for sale during the year were as follows: There are 48 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost by (a) the first-in, first-out method, (b) the last-in, first-out method, and (c) the average cost method. Show your work.

Use the following information 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. $\begin{array}{|l|l|l|l|}\hline \text { Date } & \text { Product Z } & \text { Units } & \text { Cost } \\\hline \text { May 3 } & \text { Purchase } & 5 & \$ 20 \\\hline \text { May 10 } & \text { Sale } & 3 & \\\hline \text { May 17 } & \text { Purchase } & 10 & \$ 24 \\\hline \text { May 20 } & \text { Sale } & 6 & \\\hline \text { May 23 } & \text { Sale } & 3 & \\\hline \text { May 30 } & \text { Purchase } & 10 & \$ 30 \\\hline\end{array}$ Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method.

A business using the retail method of inventory costing determines that merchandise inventory at retail is $2,300,000. If the ratio of cost to retail price is 55%, what is the amount of inventory to be reported on the financial statements?

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. The effect on the balance sheet and income statement would be as follows:

Damaged merchandise that can be sold only at prices below cost should be valued at

The following lots of a particular commodity were available for sale during the year: $\begin{array}{ll}\text { Beginning invent ory } & 10 \text { units at } \$ 30 \\\text { First purchase } & 25 \text { units at } \$ 32 \\\text { Second purchase } & 30 \text { units at } \$ 34 \\\text { Third purchase } & 10 \text { units at } \$ 35\end{array}$ 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 amount of inventory at the end of the year according to the LIFO method?

Based on the following information, compute (a) Inventory turnover; (b) Average daily cost of merchandise sold using a 365 day year; and (c) Number of days' sales in inventory.

The following lots of a particular commodity were available for sale during the year: $\begin{array}{ll}\text { Beginning inventory } & 10 \text { units at } \$ 60 \\\text { First purchase } & 25 \text { units at } \$ 65 \\\text { Second purchase } & 30 \text { units at } \$ 68 \\\text { Third purchase } & 15 \text { units at } \$ 75\end{array}$ 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 the inventory at the end of the year using the FIFO method?

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

A company will most likely use an estimated method of determining inventory when

Use the following information 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. $\begin{array}{|l|l|l|l|}\hline \text { Date } & \text { Product Z } & \text { Units } & \text { Cost } \\\hline \text { May 3 } & \text { Purchase } & 5 & \$ 20 \\\hline \text { May 10 } & \text { Sale } & 3 & \\\hline \text { May 17 } & \text { Purchase } & 10 & \$ 24 \\\hline \text { May 20 } & \text { Sale } & 6 & \\\hline \text { May 23 } & \text { Sale } & 3 & \\\hline \text { May 30 } & \text { Purchase } & 10 & \$ 30 \\\hline\end{array}$ Assuming that the company uses the perpetual inventory system, determine the ending inventory value for the month of May using the FIFO inventory cost method.