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Exam 6: Inventories

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Question 81

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Beginning inventory, purchases and sales data for T-shirts are as follows: Assuming the business maintains a periodic inventory system, calculate the cost of merchandise sold and ending inventory under the following assumptions: a. FIFO b. LIFO c. Average cost (round cost of merchandise sold and ending inventory to the nearest dollar)

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a. Cost of Merchandise Sold = $642.00
En...

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Question 82

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During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is

A) FIFO
B) LIFO
C) average cost
D) weighted average

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

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Question 83

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Assume that three identical units of merchandise are purchased during October, as follows: Assume one unit is sold on October 31 for $15. Determine Cost of Merchandise Sold, Gross Profit, and Ending Inventory under the Average Cost method.

The two most widely used methods for determining the cost of inventory are

If a fire destroys the merchandise inventory, the gross profit method can be used to estimate the cost of merchandise destroyed.

During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory.

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item, by major classification of inventory, or by the total inventory.

Under the periodic inventory system, the merchandise inventory account continuously discloses the amount of inventory on hand.

The following lots of a particular commodity were available for sale during the year: 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 average cost method?

Stevens Company started the year with an inventory cost of $145,000. During the month of January they purchased inventory that cost of $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

For the year ended December 31, 2011 Depot Max's cost of merchandise sold was $54,350. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days sales in inventory is closest to

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

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

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.

The following lots of a particular commodity were available for sale during the year: 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 cost of goods sold the year according to the LIFO method?

A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.

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

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

Unsold consigned merchandise should be included in the consignee's inventory.