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Exam 6: Inventories Periodic Approach

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Question 71

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

A) the external auditors.
B) the SEC.
C) the internal auditors.
D) management.

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

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Question 72

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The following accounts are included in the ledger of Wainwright Company: Advertising expense Freight-in Inventory Purchases Purchase returns and allowances Sales revenue Sales returns and allowances Which of the accounts would be included in calculating cost of goods sold?

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Freight-in
Inventory...

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Question 73

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Inventoriable costs include all of the following except the

Understating beginning inventory will understate

In a period of inflation, the cost flow method that results in the lowest income taxes is the

Indrisano's Used Cars uses the specific identification method of costing inventory. During March, Indrisano purchased three cars for $12,000, $14,400, and $19,200, respectively. During March, two cars are sold for a total of $34,600. Indrisano determines that at March 31, the $14,400 car is still on hand. What is Indrisano's gross profit for March?

Inventory turnover is calculated as cost of goods sold divided by ending inventory.

Items waiting to be used in production are considered to be

A new average cost is computed each time a purchase is made in the

The consistent application of an inventory costing method is essential for

Disclosures about inventory should include each of the following except the

Shellhammer Company's inventory records show the following data for the month of September: A physical inventory on September 30 shows 200 units on hand. Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Shanrock Company uses the periodic inventory method and had the following inventory information available: A physical count of inventory on December 31 revealed that there were 400 units on hand. Instructions Answer the following independent questions and show computations supporting your answers. 1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $__________. 2. Assume that the company uses the Average-Cost method. The value of the ending inventory on December 31 is $__________. 3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is $__________. 4. Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?

The following information is available for Yancey Company: Assume that Yancey uses a periodic inventory system and that there are 700 units left at the end of the month. Instructions Compute each of the following under the average-cost method: (a) Cost of ending inventory. (b) Cost of goods sold.

Under the lower-of-cost-or-net realizable value basis in valuing inventory, net realizable value is the

In a period of falling prices, the LIFO method results in a lower cost of goods sold than the FIFO method.

Nolen Company is preparing the annual financial statements dated December 31, 2018. Information about inventory stocked for regular sale follows: Instructions Compute the valuation for the December 31, 2018, inventory using the lower-of-cost-or-snet realizable value basis.

It is generally recognized that a major objective of accounting for inventory is the proper determination of ______________.

If goods in transit are shipped FOB destination

Finished goods are a classification of inventory for a manufacturer that are completed and ready for sale.