Question 1

Ending inventory using the FIFO method is:

Accepted Answer

A)  $ 650.
B)  $1,000.
C)  $ 707.
D)  $ 600.E) A) and B)
F) A) and C)

Question 2

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

Accepted Answer

The answer of Listed below are 5 terms followed by...

Question 3

Required: Compute the January 31 ending inventory and cost of goods sold for January,assuming Denver uses average cost and a perpetual inventory system.

Accepted Answer

Perpetual ...

Question 4

In a period when costs are falling and inventory quantities are stable,the lowest taxable income would be reported by using the inventory method of:

Accepted Answer

A)  Weighted average.
B)  LIFO.
C)  Moving average.
D)  FIFO.E) B) and C)
F) None of the above

Question 5

The ending inventory under a periodic inventory system assuming average cost (rounding unit cost to three decimal places) is:

Accepted Answer

A)  $5,087.
B)  $5,107.
C)  $5,077.
D)  $5,005.E) C) and D)
F) A) and D)

Question 6

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016.  Missing information has been left blank.
-Required:  Compute the missing amounts.

Accepted Answer

The answer of The following information is taken from the...

Question 7

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016.  Missing information has been left blank.
-Required:  Compute the missing amounts.

Accepted Answer

The answer of The following information is taken from the...

Question 8

The LIFO Conformity Rule states that if LIFO is used for:

Accepted Answer

A)  One class of inventory,it must be used for all classes of inventory.
B)  Tax purposes,it must be used for financial reporting.
C)  One company in an affiliated group,it must be used by all companies in an affiliated group.
D)  Domestic companies,it must be used by foreign partners.E) A) and C)
F) None of the above

Question 9

The gross profit ratio is calculated by dividing gross profit by average inventory.

Accepted Answer

A) True 
 B)False

Question 10

LIFO usually provides a better match of revenue and expense than does FIFO.

Accepted Answer

A) True 
 B)False

Question 11

HH Company uses LIFO.HH disclosed that if FIFO had been used,inventory at the end of 2016 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2015.Assuming HH has a 30% income tax rate:

Accepted Answer

A)  Its reported cost of goods for 2016 would have been $14 million less if it had used FIFO rather than LIFO for its financial statements.
B)  Its reported cost of goods for 2016 would have been $20 million less if it had used FIFO rather than LIFO for its financial statements.
C)  Its reported cost of goods sold for 2016 would have been $14 million higher if it had used FIFO rather than LIFO for its financial statements.
D)  Its reported cost of goods sold for 2016 would have been $20 million higher if it had used FIFO rather than LIFO for its financial statements.E) A) and D)
F) C) and D)

Question 12

Thompson's 2016 gross profit ratio is:

Accepted Answer

A)  25%.
B)  19%.
C)  20%.
D)  None of the above is correct.E) B) and C)
F) A) and C)

Question 13

Physical counts of inventory are never made with perpetual inventory systems.

Accepted Answer

A) True 
 B)False

Question 14

Under the net method,purchase discounts lost are:

Accepted Answer

A)  Included in purchases.
B)  Added to accounts payable.
C)  Included in interest expense.
D)  Deducted from discount income.E) All of the above
F) A) and B)

Question 15

What is Nu's gross profit ratio if it elects LIFO?

Accepted Answer

A)  80%.
B)  49%.
C)  40%.
D)  5%.E) B) and C)
F) A) and D)

Question 16

In a perpetual inventory system,the cost of inventory sold is:

Accepted Answer

A)  Debited to accounts receivable.
B)  Credited to cost of goods sold.
C)  Debited to cost of goods sold.
D)  Not recorded at the time goods are sold.E) A) and D)
F) C) and D)

Question 17

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

Accepted Answer

The answer of Listed below are 5 terms followed by...

Question 18

Alison's dress shop buys dresses from McGuire Manufacturing.Alison purchased dresses from McGuire on July 17 and received an invoice with a list price amount of $6,000 and payment terms of 2/10,n/30.Alison uses the net method to record purchases.Alison should record the purchase at:

Accepted Answer

A)  $5,940.
B)  $5,880.
C)  $6,000.
D)  $6,120.E) B) and D)
F) B) and C)

Question 19

What is Nueva's net income if it elects LIFO?

Accepted Answer

A)  $440.
B)  $264.
C)  $620.
D)  $372.E) A) and B)
F) A) and C)

Question 20

The largest expense on a retailer's income statement is typically:

Accepted Answer

A)  Salaries and wages.
B)  Cost of goods sold.
C)  Income tax expense.
D)  Depreciation expense.E) C) and D)
F) A) and B)

Exam 8: Inventories: Measurement

Thompson's 2016 gross profit ratio is:

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Required: Compute the January 31 ending inventory and cost of goods sold for January,assuming Denver uses average cost and a perpetual inventory system.

Correct AnswerverifiedPerpetual ...View AnswerShow Answer

The ending inventory under a periodic inventory system assuming average cost (rounding unit cost to three decimal places) is:

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HH Company uses LIFO.HH disclosed that if FIFO had been used,inventory at the end of 2016 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2015.Assuming HH has a 30% income tax rate:

Correct AnswerverifiedShow Answer

Alison's dress shop buys dresses from McGuire Manufacturing.Alison purchased dresses from McGuire on July 17 and received an invoice with a list price amount of $6,000 and payment terms of 2/10,n/30.Alison uses the net method to record purchases.Alison should record the purchase at:

Correct AnswerverifiedShow Answer

Under the net method,purchase discounts lost are:

Correct AnswerverifiedShow Answer

The LIFO Conformity Rule states that if LIFO is used for:

Correct AnswerverifiedShow Answer

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016. Missing information has been left blank. -Required: Compute the missing amounts.

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In a period when costs are falling and inventory quantities are stable,the lowest taxable income would be reported by using the inventory method of:

Correct AnswerverifiedShow Answer

Ending inventory using the FIFO method is:

Correct AnswerverifiedShow Answer

LIFO usually provides a better match of revenue and expense than does FIFO.

Correct AnswerverifiedShow Answer

The gross profit ratio is calculated by dividing gross profit by average inventory.

Correct AnswerverifiedShow Answer

What is Nu's gross profit ratio if it elects LIFO?

Correct AnswerverifiedShow Answer

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

Correct AnswerverifiedShow Answer

Physical counts of inventory are never made with perpetual inventory systems.

Correct AnswerverifiedShow Answer

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016. Missing information has been left blank. -Required: Compute the missing amounts.

Correct AnswerverifiedShow Answer

In a perpetual inventory system,the cost of inventory sold is:

Correct AnswerverifiedShow Answer

The largest expense on a retailer's income statement is typically:

Correct AnswerverifiedShow Answer

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

Correct AnswerverifiedShow Answer

What is Nueva's net income if it elects LIFO?

Correct AnswerverifiedShow Answer

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