FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Merchandise Inventory

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is NOT included in a perpetual inventory record?

A) identification of the inventory item
B) cost per unit
C) unit selling price
D) quantity on hand

E) None of the above
F) All of the above

Correct Answer

verified

Show Answer

Question 32

Essay

Review LaterAdd Note

Review Later

Complete the following table,which compares the effects of LIFO,FIFO and weighted-average inventory costing methods on the financial statements in periods of declining inventory costs.The answer should be lowest,highest,or middle.

Correct Answer

verified

Show Answer

Question 33

Essay

Review LaterAdd Note

State the accounting term that applies to each of the following definitions.

A company that uses the perpetual inventory system sold goods for $2,600 to a customer on account.The company had purchased the inventory for $500.Which of the following journal entries correctly records the cost of goods sold?

Landers,Inc.has 7 units in inventory on December 31.The units were purchased in November for $180 each.The price lists from suppliers indicate the current replacement cost of the item to be $174 each.What is the effect on gross profit if Landers values its ending merchandise inventory using the lower-of-cost-or-market rule?

Jacob,Inc.had the following balances and transactions during 2019: What is the amount of the company's ending Merchandise Inventory,as disclosed in the December 31,2019 balance sheet,using the periodic weighted-average inventory costing method? (Round the unit costs to two decimal places and total costs to the nearest dollar. )

Martha,Inc.had 21,000 units of ending inventory that were recorded at the cost of $8.00 per unit using the FIFO method.The current replacement cost is $4.25 per unit.Which of the following amounts would be reported as ending Merchandise Inventory on the balance sheet using the lower-of-cost-or-market rule?

Samson,Inc.had the following balances and transactions during 2019: What is the balance of the company's Merchandise Inventory,as disclosed in the December 31,2019 balance sheet as per the periodic FIFO inventory costing method?

A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $9,000 and paid $790 for the freight-in.The company sold the whole lot to a supermarket chain for $13,000 on account.The company uses the specific-identification method of inventory costing.Which of the following entries correctly records the cost of goods sold?

Inventory turnover measures the number of times a company sells its average level of merchandise inventory during a period.

The amounts obtained for cost of goods sold and ending merchandise inventory are not the same for FIFO perpetual and FIFO periodic.

The total cost spent on inventory that was available to be sold during a period is called the cost of goods sold.

Properly recording inventory when sold and removing the units sold from the inventory count will prevent a company from running out of inventory.

Which of the following is the correct formula to calculate average merchandise inventory?

Smithson Electrical Fixtures reported the following income statement for the year ended December 31,2019. Compute inventory turnover rate for the year.(Round to two decimal places. ) Compute days' sales in inventory for the year.(Round to two decimal places. )

Handbags,Inc.had 400 units of inventory on hand at the end of the year.These were recorded at a cost of $14 each using the last-in,first-out (LIFO) method.The current replacement cost is $10 per unit.The selling price charged by Handbags,Inc.for each finished product is $17.In order to record the adjusting entry needed under the lower-of-cost-or-market rule,the Cost of Goods Sold will be ________.

An overstatement of ending merchandise inventory in the current period results in an understatement of cost of goods sold in the current period.

Provide a definition for each of the following accounting principles.

Which of the following is affected as a result of an error in performing the physical count of inventory at the end of the accounting period?

Inventory turnover is computed by dividing average merchandise inventory by cost of goods sold.