Question 1

Cost of Goods Sold is:

Accepted Answer

A)  An asset account.
B)  A revenue account.
C)  An expense account.
D)  A permanent equity account.E) None of the above
F) A) and D)

Question 2

A company reports the following amounts at the end of the year:  Compute the company's gross profit ratio.

Accepted Answer

The answer of A company reports the following amounts at...

Question 3

Ending inventory is equal to the cost of items on hand plus:

Accepted Answer

A)  Items in transit sold FOB shipping point.
B)  Sales discounts.
C)  Items in transit sold FOB destination.
D)  Advertising expense.E) B) and C)
F) None of the above

Question 4

Listed below are four terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term placing the letter designating the term in the space provided.
-_____ Indicates that title to inventory transfers from the seller to the buyer once it reaches the buyer.

Accepted Answer

A)  FOB shipping point
B)  FOB destination
C)  Periodic inventory system
D)  Perpetual inventory systemE) All of the above
F) A) and B)

Question 5

Consider the following year-end information for Spitzer Corporation:
What amount will Spitzer report for operating income?

Accepted Answer

A)  $200,000.
B)  $210,000.
C)  $380,000.
D)  $120,000.E) B) and D)
F) A) and C)

Question 6

A company understated its ending inventory balance by $8,000 in 2015.What impact will this error have on cost of goods sold and gross profit in 2015 and 2016?

Accepted Answer

2015
Cost of goods sold is ove...

Question 7

Good,Inc.sold inventory for $1,200 that was purchased for $700.Good records which of the following when it sells inventory using a periodic inventory system?

Accepted Answer

A)  No entry is required for cost of goods sold and inventory.
B)  Debit Cost of Goods Sold $700;credit Inventory $700.
C)  Debit Cost of Goods Sold $1,200;credit Inventory $1,200.
D)  Debit Inventory $700;credit Cost of Goods Sold $700.E) A) and B)
F) B) and C)

Question 8

Freight-in is included in the cost of inventory.

Accepted Answer

A) True 
 B)False

Question 9

__________ is commonly referred to as the income statement approach.

Accepted Answer

The answer of __________ is commonly referred to as the...

Question 10

Anthony Corporation reported the following amounts for the year:  Anthony's average days in inventory is:

Accepted Answer

A)  170 days.
B)  114 days.
C)  132 days.
D)  151 days.E) B) and D)
F) B) and C)

Question 11

Sales revenue minus cost of goods sold is referred to as operating income.

Accepted Answer

A) True 
 B)False

Question 12

When inventory costs are rising,__________ generally results in a lower income tax obligation.

Accepted Answer

The answer of When inventory costs are rising,__________ generally results...

Question 13

Baker Fine Foods has beginning inventory for the year of $12,000.During the year,Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory.Baker will report cost of goods sold equal to:

Accepted Answer

A)  $150,000.
B)  $158,000.
C)  $142,000.
D)  $170,000.E) A) and D)
F) None of the above

Question 14

A company overstated its ending inventory balance by $6,000 in 2015.What impact will this error have on cost of goods sold and gross profit in 2015 and 2016?

Accepted Answer

2015
Cost of goods sold is und...

Question 15

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

Accepted Answer

A)  FIFO.
B)  LIFO.
C)  Weighted average.
D)  Each method always produces a different amount.E) B) and D)
F) C) and D)

Question 16

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term placing the letter designating the term in the space provided.
-_____ Additional amount of inventory a company would report if it used FIFO instead of LIFO.

Accepted Answer

A)  Ending inventory
B)  Freight-in
C)  Cost of goods sold
D)  LIFO conformity rule
E)  LIFOF) Freight-outG) LIFO reserveH) Specific identificationI) FIFOJ) Average costK) All of the above
L) C) and G)

Question 17

Which of the following is incorrect regarding LIFO and FIFO?

Accepted Answer

A)  In a period of decreasing costs,FIFO will result in lower total assets than LIFO.
B)  In a period of increasing costs,net income will be greater under FIFO than LIFO.
C)  In a period of increasing costs,assets will be greater for LIFO than FIFO.
D)  In a period of decreasing costs,LIFO will result in greater net income than FIFO.E) C) and D)
F) A) and B)

Question 18

What effect would an adjustment to record inventory at the lower-of-cost-or-market have on the company's financial statements?

Accepted Answer

A)  An increase to assets.
B)  An increase to stockholders' equity.
C)  A decrease to revenue.
D)  An increase to expense.E) B) and C)
F) All of the above

Exam 6: Inventory and Cost of Goods Sold

A company reports the following amounts at the end of the year: Compute the company's gross profit ratio.

Correct Answer
verified

What effect would an adjustment to record inventory at the lower-of-cost-or-market have on the company's financial statements?

Correct Answer
verified

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term placing the letter designating the term in the space provided. -_____ Additional amount of inventory a company would report if it used FIFO instead of LIFO.

Correct Answer
verified

Anthony Corporation reported the following amounts for the year: Anthony's average days in inventory is:

Correct Answer
verified

__________ is commonly referred to as the income statement approach.

Correct Answer
verified

Cost of Goods Sold is:

Correct Answer
verified

Ending inventory is equal to the cost of items on hand plus:

Correct Answer
verified

A company overstated its ending inventory balance by $6,000 in 2015.What impact will this error have on cost of goods sold and gross profit in 2015 and 2016?

Correct Answer
verified
2015
Cost of goods sold is und...
View Answer

Good,Inc.sold inventory for $1,200 that was purchased for $700.Good records which of the following when it sells inventory using a periodic inventory system?

Correct Answer
verified

When inventory costs are rising,__________ generally results in a lower income tax obligation.

Correct Answer
verified

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

Correct Answer
verified

Baker Fine Foods has beginning inventory for the year of $12,000.During the year,Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory.Baker will report cost of goods sold equal to:

Correct Answer
verified

Sales revenue minus cost of goods sold is referred to as operating income.

Correct Answer
verified

A company understated its ending inventory balance by $8,000 in 2015.What impact will this error have on cost of goods sold and gross profit in 2015 and 2016?

Correct Answer
verified
2015
Cost of goods sold is ove...
View Answer

Which of the following is incorrect regarding LIFO and FIFO?

Correct Answer
verified

Correct Answer
verified

Freight-in is included in the cost of inventory.

Correct Answer
verified

Consider the following year-end information for Spitzer Corporation: What amount will Spitzer report for operating income?

Correct Answer
verified

Exam 6: Inventory and Cost of Goods Sold

A company reports the following amounts at the end of the year: Compute the company's gross profit ratio.

Correct AnswerverifiedShow Answer

What effect would an adjustment to record inventory at the lower-of-cost-or-market have on the company's financial statements?

Correct AnswerverifiedShow Answer

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term placing the letter designating the term in the space provided. -_____ Additional amount of inventory a company would report if it used FIFO instead of LIFO.

Correct AnswerverifiedShow Answer

Anthony Corporation reported the following amounts for the year: Anthony's average days in inventory is:

Correct AnswerverifiedShow Answer

__________ is commonly referred to as the income statement approach.

Correct AnswerverifiedShow Answer

Cost of Goods Sold is:

Correct AnswerverifiedShow Answer

Ending inventory is equal to the cost of items on hand plus:

Correct AnswerverifiedShow Answer

A company overstated its ending inventory balance by $6,000 in 2015.What impact will this error have on cost of goods sold and gross profit in 2015 and 2016?

Correct Answerverified2015Cost of goods sold is und...View AnswerShow Answer

Good,Inc.sold inventory for $1,200 that was purchased for $700.Good records which of the following when it sells inventory using a periodic inventory system?

Correct AnswerverifiedShow Answer

When inventory costs are rising,__________ generally results in a lower income tax obligation.

Correct AnswerverifiedShow Answer

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

Correct AnswerverifiedShow Answer

Baker Fine Foods has beginning inventory for the year of $12,000.During the year,Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory.Baker will report cost of goods sold equal to:

Correct AnswerverifiedShow Answer

Sales revenue minus cost of goods sold is referred to as operating income.

Correct AnswerverifiedShow Answer

A company understated its ending inventory balance by $8,000 in 2015.What impact will this error have on cost of goods sold and gross profit in 2015 and 2016?

Correct Answerverified2015Cost of goods sold is ove...View AnswerShow Answer

Which of the following is incorrect regarding LIFO and FIFO?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Freight-in is included in the cost of inventory.

Correct AnswerverifiedShow Answer

Consider the following year-end information for Spitzer Corporation: What amount will Spitzer report for operating income?

Correct AnswerverifiedShow Answer

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2015
Cost of goods sold is und...
View Answer

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2015
Cost of goods sold is ove...
View Answer

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