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Exam 7: Inventories

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Question 71

Multiple Choice

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Use the information below to answer the following questions. ​ The following units of an inventory item were available for sale during the year: 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​

A) $1,250
B) $1,350
C) $1,375
D) $1,150

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

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Question 72

True/False

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The specific identification inventory method should be used when the inventory consists of identical,low-cost units that are purchased and sold frequently.

A) True
B) False

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Question 73

Multiple Choice

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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

During periods of increasing costs,the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

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

During periods of increasing costs,an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

The inventory method that assigns the most recent costs to cost of merchandise sold is

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

Use the information below to answer the following questions. ​ The following lots of a particular commodity were available for sale during the year: 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 inventory at the end of the year using the FIFO method?​

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

The units of Manganese Plus available for sale during the year were as follows:​ There are 15 units of the product in the physical inventory at November 30.The periodic inventory system is used.Determine the inventory cost by the (a)FIFO, (b)LIFO,and (c)average cost methods.

While taking a physical inventory,a company counts its inventory as less than the actual amount on hand.How will this error affect the income statement?

The days' sales in inventory measures the

For the year ended December 31,Depot Max's cost of merchandise sold was $56,900.Inventory at the beginning of the year was $6,540.Ending inventory was $7,250.Compute Depot Max's inventory turnover for the year.

When using a perpetual inventory system,the journal entry to record the cost of merchandise sold is

If a company values inventory at the lower of cost or market,which of the following is the value of merchandise inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole.

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

Merchandise inventory at the end of the year was inadvertently overstated.Which of the following statements correctly states the effect of the error on net income,assets,and owner's equity?

Under a perpetual inventory system,the amount of each type of merchandise on hand is available in the

Use the information for Addison,Inc.If Addison uses LIFO,the cost of the ending merchandise inventory on September 30 is