FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Inventory and Cost of Goods Sold

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

The type of income statement that classifies items as operating and nonoperating is the ______ income statement.

A) Consolidated
B) Multiple-step
C) Classified

D) B) and C)
E) All of the above

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is true concerning inventory cost flow assumptions?

A) LIFO produces higher net income than FIFO in a period of rising costs.
B) FIFO is an income statement focus.
C) LIFO is a balance sheet focus.
D) None of the other answers are true.

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

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month.Cost of goods sold assuming FIFO would be: $\begin{array} { | l | l | c | r | } \hline \text { Date } & \text { Transaction } & \text { Number of Units } & \text { Unit Cost } \\\hline \text { Apr. 1 } & \text { Beginning inventory } & 500 & \$ 2.40 \\\text { Apr. 20 } & \text { Purchase } & 400 & 2.50 \\\hline\end{array}$

If a company has beginning inventory of $15,000,purchases during the year of $75,000,and ending inventory of $20,000,cost of goods sold equals $70,000.

Truman Co.sells a large number of common household items,while Stapleton sells a small number of expensive items.The two companies report the same dollar amount for ending inventory and gross profit for the year.Which of the following is most likely true?

One of the major differences between service companies and retail or manufacturing companies is that retailers and manufacturers must account for:

FIFO is considered a balance sheet approach for reporting inventory because it:

In a periodic inventory system,the purchase of inventory is debited to:

Consider the following inventory transactions for September: For the month of September,the company sold 35 units.What is cost of goods sold under the weighted-average cost method (round the weighted-average unit cost to four decimals and final answer to the nearest whole dollar) ? $\begin{array} { | l | l | } \hline \text { Beginning inventory } & 15 \text { units } @ \$ 3.00 \\\hline \text { Purchase on September } 12 & 20 \text { units } @ \$ 3.50 \\\text { Purchased on September 23 } & 10 \text { units } @ \$ 4.00 \\\hline\end{array}$

Northwest Fur Co.started the year with $94,000 of merchandise inventory on hand.During the year,$400,000 in merchandise was purchased on account with credit terms of 1/15,n/45.All discounts were taken.Northwest paid freight-in charges of $7,500.Merchandise with an invoice amount of $5,000 was returned for credit.Cost of goods sold for the year was $380,000.What is ending inventory?

The distinction between operating and nonoperating income relates to:

Which inventory cost flow assumption generally results in the highest reported amount for cost of goods sold when inventory costs are falling?

Using a perpetual inventory system,the purchase of inventory is recorded with a debit to the Purchases account,which is a temporary account closed to cost of goods sold at the end of the period.The debit is to the Inventory account.

One of the primary benefits of using FIFO when inventory costs are rising is that it results in greater tax savings.When inventory costs are rising,LIFO provides greater tax savings.

The practice of using the lower of cost and net realizable value to evaluate inventory reflects which of the following accounting principles?

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:

If a company has ending inventory of $25,000,purchases during the year of $95,000,and beginning inventory of $30,000,cost of goods sold equals $90,000.Beginning Inventory ($30,000)+ Purchases ($95,000)- Ending Inventory ($25,000)= Cost of Goods Sold ($100,000).

Which of the following items may be classified as nonoperating revenues and expenses?

Merchandise sold FOB destination indicates that:

The inventory turnover ratio is measured as: