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| 1 | |
Consider the following inventory activity:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH08_Q1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (35.0K)</a>]]>
The 9 units of ending inventory are identified with the purchase of May 20. Using the specific identification method, calculate the value of the ending inventory and the cost of goods sold. |
| | A) | $126 and $430, respectively |
| | B) | $126 and $530, respectively |
| | C) | $126 and $544, respectively |
| | D) | $56 and $474, respectively |
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| 2 | |
Consider the following inventory activity:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH08_Q2.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (21.0K)</a>]]>
What is the value of the ending inventory, using a perpetual inventory system and a FIFO cost flow assumption? |
| | A) | $46 |
| | B) | $56 |
| | C) | $36 |
| | D) | $26 |
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| 3 | |
During periods of inflation, the inventory method that produces the greatest income tax benefits is which of the following? |
| | A) | FIFO method |
| | B) | LIFO method |
| | C) | Average cost method |
| | D) | Specific identification method |
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| 4 | |
Consider the following:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH08_Q4.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (34.0K)</a>]]>
Using the LCM rules on the basis of inventory category, the write-down of inventory would be |
| | A) | $50 |
| | B) | $250 |
| | C) | $150 |
| | D) | $200 |
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| 5 | |
Consider the following inventory activity:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH08_Q5.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (35.0K)</a>]]>
The 14 units of ending inventory are identified with the purchase of May 20. Assume a periodic inventory system and use the specific identification method to calculate the value of the ending inventory and the cost of goods sold. |
| | A) | $290 and $430, respectively |
| | B) | $190 and $530, respectively |
| | C) | $196 and $524, respectively |
| | D) | $196 and $474, respectively |
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| 6 | |
Consider the following inventory activity:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH08_Q6.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (22.0K)</a>]]>
If 83 units were sold, what is the value of the ending inventory under a periodic inventory system and a FIFO cost flow assumption? |
| | A) | $219 |
| | B) | $905 |
| | C) | $177 |
| | D) | $204 |
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| 7 | |
Consider the following inventory activity:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH08_Q7.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>]]>
Five hundred and eighty units are unsold. Using the LIFO cost flow assumption and a periodic inventory system, what is the cost assigned to the ending merchandise inventory? |
| | A) | $10,800 |
| | B) | $11,800 |
| | C) | $11,970 |
| | D) | $11,000 |
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| 8 | |
Consider the following
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH08_Q8.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (26.0K)</a>]]>
Which condition is true with regard to errors in the ending inventory? |
| | A) | Line A |
| | B) | Line B |
| | C) | Line C |
| | D) | Line D |
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| 9 | |
Beginning inventory of $40,000 plus purchases of $30,000 equals which of the following? |
| | A) | Cost of goods available for sale of $10,000 |
| | B) | Cost of goods sold of $10,000 |
| | C) | Net income of $70,000 |
| | D) | Cost of goods available for sale of $70,000 |
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| 10 | |
Which one of the following is the formula for the inventory turnover rate? |
| | A) | Net sales/Cost of goods sold |
| | B) | Cost of goods sold/Average inventory |
| | C) | Cost of goods sold/Ending Inventory |
| | D) | Average inventory/Cost of goods sold |
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