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Exam 6: Inventories

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Question 81

Multiple Choice

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Which one of the following inventory methods is often impractical to use?

A) Specific identification
B) LIFO
C) FIFO
D) Average cost

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

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Question 82

Multiple Choice

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Cost of goods sold is computed from the following equation:

A) beginning inventory - cost of goods purchased + ending inventory.
B) sales - cost of goods purchased + beginning inventory - ending inventory.
C) sales + gross profit - ending inventory + beginning inventory.
D) beginning inventory + cost of goods purchased - ending inventory.

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

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Question 83

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The lower-of-cost-or-market basis is an example of the accounting concept of conservatism.

Pappy's Staff Junkets has the following inventory information. Assuming that a perpetual inventory system is used, what is the ending inventory on a LIFO basis?

If a company has no beginning inventory and the unit price of inventory is increasing during a period, the cost of goods available for sale during the period will be the same under the LIFO and FIFO inventory methods.

Moroni Industries has the following inventory information. Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a FIFO basis?

Othello Company understated its inventory by $20,000 at December 31, 2014. It did not correct the error in 2014 or 2015. As a result, Othello's stockholder's equity was:

The more inventory a company has in stock, the greater the company's profit.

Netta Shutters has the following inventory information. A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand. Assume a periodic inventory system is used. Assuming that the specific identification method is used and that ending inventory consists of 20 units from each of the three purchases and 30 units from the November 1 inventory, cost of goods sold is

Freight terms of FOB shipping point mean that the

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

At May 1, 2015, Kibbee Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows: The company sold 1,000 units during the month for $12 per unit. Kibbee uses the average cost method. The value of Kibbee's inventory at May 31, 2015 is

A company purchased inventory as follows: The average unit cost for inventory is

Under the retail inventory method, the estimated cost of ending inventory is computed by multiplying the cost-to-retail ratio by

Inventories affect

Romanoff Industries had the following inventory transactions occur during 2015: The company sold 150 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's after-tax income using FIFO? (rounded to whole dollars)

The selection of an appropriate inventory cost flow assumption for an individual company is made by

When valuing ending inventory under a perpetual inventory system, the

The specific identification method of costing inventories is used when the

The following information was available for Pete Company at December 31, 2015: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $984,000; and sales $1,350,000. Pete's inventory turnover in 2015 was