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Test sobre chapter 6, creado por robertse10 el 27/10/2014.

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chapter 6

Pregunta 1 de 48

1

Manufactured inventory that has begun the production process but is not yet completed is

Selecciona una de las siguientes respuestas posibles:

  • work in process.

  • raw materials.

  • merchandise inventory.

  • finished goods.

Explicación

Pregunta 2 de 48

1

The factor which determines whether or not goods should be included in a physical count of inventory is

Selecciona una de las siguientes respuestas posibles:

  • physical possession.

  • whether or not the purchase price has been paid.

  • management's judgment.

  • legal title

Explicación

Pregunta 3 de 48

1

If goods in transit are shipped FOB destination

Selecciona una de las siguientes respuestas posibles:

  • the seller has legal title to the goods until they are delivered.

  • the buyer has legal title to the goods until they are delivered.

  • the transportation company has legal title to the goods while the goods are in transit.

  • no one has legal title to the goods until they are delivered.

Explicación

Pregunta 4 de 48

1

Independent internal verification of the physical inventory process occurs when

Selecciona una de las siguientes respuestas posibles:

  • a second employee counts the inventory and compares the result to the count made by the first employee.

  • all prenumbered inventory tags are accounted for.

  • the items counted are compared to the inventory account balance.

  • the employee is required to count all items twice for sake of verification.

Explicación

Pregunta 5 de 48

1

An employee assigned to counting computer monitors in boxes should

Selecciona una de las siguientes respuestas posibles:

  • determine that the box contains a monitor.

  • rely on the warehouse records of the number of computer monitors.

  • read each box and rely on the box description for the contents.

  • estimate the number if there is a large quantity to be counted.

Explicación

Pregunta 6 de 48

1

After the physical inventory is completed

Selecciona una de las siguientes respuestas posibles:

  • quantities are entered into various general ledger inventory accounts.

  • unit costs are determined by dividing the quantities on the summary sheets by the total inventory costs.

  • the accuracy of the inventory summary sheets is checked by the person listing the quantities on the sheets.

  • quantities are listed on inventory summary sheets.

Explicación

Pregunta 7 de 48

1

When is a physical inventory usually taken?

Selecciona una de las siguientes respuestas posibles:

  • When the company has its greatest amount of inventory.

  • At the end of the company’s fiscal year.

  • When the company has its greatest amount of inventory and at the end of the company's fiscal year.

  • When goods are not being sold or received.

Explicación

Pregunta 8 de 48

1

Which of the following should not be included in the physical inventory of a company

Selecciona una de las siguientes respuestas posibles:

  • Goods shipped on consignment to another company.

  • All of these answer choices should be included.

  • Goods held on consignment from another company.

  • Goods in transit from another company shipped FOB shipping point.

Explicación

Pregunta 9 de 48

1

Tidwell Company's goods in transit at December 31 include sales made
(1) FOB destination
(2) FOB shipping point
and purchases made
(3) FOB destination
(4) FOB shipping point.

Which items should be included in Tidwell's inventory at December 31?

Selecciona una de las siguientes respuestas posibles:

  • (2) and (4)

  • Sales made FOB shipping point and purchase made FOB destination

  • (1) and (4)

  • (1) and (3)

Explicación

Pregunta 10 de 48

1

The term "FOB" denotes

Selecciona una de las siguientes respuestas posibles:

  • freight charge on buyer.

  • free only (to) buyer.

  • free on board.

  • freight on board.

Explicación

Pregunta 11 de 48

1

Goods held on consignment are

Selecciona una de las siguientes respuestas posibles:

  • kept for sale on the premises of the consignor.

  • included as part of no one’s ending inventory.

  • never owned by the consignee.

  • included in the consignee’s ending inventory.

Explicación

Pregunta 12 de 48

1

Many companies use just-in-time inventory methods. Which of the following is not an advantage of this method?

Selecciona una de las siguientes respuestas posibles:

  • It lowers inventory levels and costs.

  • Companies can respond to individual customer requests.

  • it limits the risk of having obsolete items in inventory.

  • Companies may not have quantities to meet customer demand.

Explicación

Pregunta 13 de 48

1

When a perpetual inventory system is used, which of the following is a purpose of taking a physical inventory

Selecciona una de las siguientes respuestas posibles:

  • All are a purpose of taking a physical inventory when a perpetual inventory system is used.

  • To check the accuracy of the perpetual inventory records

  • To determine cost of goods sold for the accounting period

  • To compute inventory ratios

Explicación

Pregunta 14 de 48

1

Which statement is false?

Selecciona una de las siguientes respuestas posibles:

  • Companies that use a perpetual inventory system must take a physical inventory to determine inventory on hand on the balance sheet date and to determine cost of goods sold for the accounting period.

  • An inventory count is generally more accurate when goods are not being sold or received during the counting.

  • Taking a physical inventory involves actually counting, weighing, or measuring each kind of inventory on hand.
    Noing period.

  • No matter whether a periodic or perpetual inventory system is used, all companies need to determine inventory quantities at the end of each accounting period.

Explicación

Pregunta 15 de 48

1

Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?

Selecciona una de las siguientes respuestas posibles:

  • Goods that Reeves is holding on consignment for Parker Company

  • Goods in transit that Reeves has sold to Smith Company, FOB shipping point

  • Goods that Reeves is holding in inventory on March 31 for which the related Accounts Payable is 15 days past due

  • Goods in transit to Reeves, FOB destination

Explicación

Pregunta 16 de 48

1

Manufacturers usually classify inventory into all the following general categories except

Selecciona una de las siguientes respuestas posibles:

  • work in process.

  • merchandise inventory.

  • raw materials.

  • finished goods.

Explicación

Pregunta 17 de 48

1

Johnson Company has a high inventory turnover that has increased over the last year. All of the following statements are true regarding this situation except Johnson County:

Selecciona una de las siguientes respuestas posibles:

  • is increasing the amount of inventory on hand relative to sales.

  • may be losing sales due to inventory shortages.

  • has a cost of goods sold that is increasing relative to its average inventory.

  • is minimizing funds tied up in inventory.

Explicación

Pregunta 18 de 48

1

Days in inventory is calculated by dividing 365 days by

Selecciona una de las siguientes respuestas posibles:

  • the inventory turnover.

  • beginning inventory.

  • ending inventory.

  • average inventory.

Explicación

Pregunta 19 de 48

1

Which of these would cause the inventory turnover ratio to increase the most?

Selecciona una de las siguientes respuestas posibles:

  • keeping the amount of inventory on hand constant but decreasing sales.

  • decreasing the amount of inventory on hand and increasing sales.

  • increasing the amount of inventory on hand.

  • keeping the amount of inventory on hand constant but increasing sales.

Explicación

Pregunta 20 de 48

1

A low number of days in inventory may indicate all of the following except

Selecciona una de las siguientes respuestas posibles:

  • There is less chance of having obsolete inventory items.

  • The company has fewer funds tied up in inventory.

  • Management has achieved the best balance between too much and too little inventory levels.

  • Sales opportunities may be lost because of inventory shortages.

Explicación

Pregunta 21 de 48

1

Inventory costing methods place primary reliance on assumptions about the flow of

Selecciona una de las siguientes respuestas posibles:

  • goods.

  • resale prices.

  • values.

  • costs.

Explicación

Pregunta 22 de 48

1

The LIFO inventory method assumes that the cost of the latest units purchased are

Selecciona una de las siguientes respuestas posibles:

  • the first to be allocated to ending inventory.

  • the last to be allocated to cost of goods sold.

  • the first to be allocated to cost of goods sold.

  • not allocated to cost of goods sold or ending inventory.

Explicación

Pregunta 23 de 48

1

Which of the following is an inventory costing method?

Selecciona una de las siguientes respuestas posibles:

  • Perpetual

  • Specific identification

  • Lower of cost or market

  • Periodic

Explicación

Pregunta 24 de 48

1

Which of the following terms best describes the assumption made in applying the four inventory methods?

Selecciona una de las siguientes respuestas posibles:

  • Asset flow

  • Physical flow

  • Goods flow

  • Cost flow

Explicación

Pregunta 25 de 48

1

An assumption about cost flow is necessary

Selecciona una de las siguientes respuestas posibles:

  • even when there is no change in the purchase price on inventory.

  • because prices usually change, and tracking which units have been sold is difficult.

  • only when the flow of goods cannot be determined.

  • because it is required by the income tax regulation.

Explicación

Pregunta 26 de 48

1

Which of the following items will increase inventoriable costs for the buyer of goods?

Selecciona una de las siguientes respuestas posibles:

  • purchase discounts taken by the purchaser

  • freight charges paid by the purchaser

  • purchase returns and allowances granted by the seller

  • freight charges paid by the seller

Explicación

Pregunta 27 de 48

1

Of the following companies, which one would not likely employ the specific identification method for inventory costing?

Selecciona una de las siguientes respuestas posibles:

  • music store specializing in organ sales

  • farm implement dealership

  • antique shop

  • hardware store

Explicación

Pregunta 28 de 48

1

A problem with the specific identification method is that

Selecciona una de las siguientes respuestas posibles:

  • the lower of cost or market basis cannot be applied.

  • inventories can be reported at actual costs.

  • management can manipulate income.

  • matching is not achieved.

Explicación

Pregunta 29 de 48

1

The selection of an appropriate inventory cost flow assumption for an individual company is made by

Selecciona una de las siguientes respuestas posibles:

  • the internal auditors.

  • management.

  • the external auditors.

  • the SEC.

Explicación

Pregunta 30 de 48

1

The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is

Selecciona una de las siguientes respuestas posibles:

  • called the consistency principle.

  • called the physical flow assumption.

  • called the matching principle.

  • nonexistent; that is, there is no such accounting requirement.

Explicación

Pregunta 31 de 48

1

Which of the following statements is true regarding inventory cost flow assumptions?

Selecciona una de las siguientes respuestas posibles:

  • A company must use the same method for domestic and foreign operations.

  • A company may never change its inventory costing method once it has chosen a method.

  • A company must comply with the method specified by industry standards.

  • A company may use more than one costing method concurrently.

Explicación

Pregunta 32 de 48

1

Which of the following statements is correct with respect to inventories?

Selecciona una de las siguientes respuestas posibles:

  • The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold.

  • Under FIFO, the ending inventory is based on the latest units purchased.

  • FIFO seldom coincides with the actual physical flow of inventory.

  • It is generally good business management to sell the most recently acquired goods first

Explicación

Pregunta 33 de 48

1

Given equal circumstances, which inventory method would probably be the most time consuming?

Selecciona una de las siguientes respuestas posibles:

  • LIFO

  • Specific identification

  • FIFO

  • Average cost

Explicación

Pregunta 34 de 48

1

Which inventory costing method should a gasoline retailer use?

Selecciona una de las siguientes respuestas posibles:

  • LIFO

  • FIFO

  • either LIFO or FIFO

  • average cost

Explicación

Pregunta 35 de 48

1

In periods of rising prices, which is an advantage of using the LIFO inventory costing method?

Selecciona una de las siguientes respuestas posibles:

  • Ending inventory will include latest (most recent) costs and thus be more realistic.
    Net income will be the highest and thus reflect the prosperity of the c

  • Net income will be the highest and thus reflect the prosperity of the company.

  • Phantom profits are reported.

  • Cost of goods sold will include latest (most recent) costs and thus will be more realistic.

Explicación

Pregunta 36 de 48

1

In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the

Selecciona una de las siguientes respuestas posibles:

  • FIFO method.

  • LIFO method.

  • average-cost method.

  • tax method.

Explicación

Pregunta 37 de 48

1

In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory

Selecciona una de las siguientes respuestas posibles:

  • FIFO method

  • Need more information to answer

  • Average cost method

  • LIFO method

Explicación

Pregunta 38 de 48

1

In a period of rising prices, which of the following inventory methods generally results in the lowest net income figure?

Selecciona una de las siguientes respuestas posibles:

  • Average cost method

  • FIFO method

  • Need more information to answer

  • LIFO method

Explicación

Pregunta 39 de 48

1

Which inventory method generally results in costs allocated to ending inventory that will approximate their current cost?

Selecciona una de las siguientes respuestas posibles:

  • LIFO

  • Whichever method that produces the highest ending inventory figure

  • FIFO

  • Average cost method

Explicación

Pregunta 40 de 48

1

Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using

Selecciona una de las siguientes respuestas posibles:

  • FIFO will have the highest cost of goods sold.

  • FIFO will have the highest ending inventory.

  • LIFO will have the highest ending inventory.

  • LIFO will have the lowest cost of goods sold.

Explicación

Pregunta 41 de 48

1

If companies have identical inventoriable costs but use different inventory flow assumptions when the price of goods have not been constant, then the

Selecciona una de las siguientes respuestas posibles:

  • net income of the companies will be identical.

  • ending inventory of the companies will be identical.

  • cost of goods purchased during the year will be identical.

  • cost of goods sold of the companies will be identical.

Explicación

Pregunta 42 de 48

1

In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense?

Selecciona una de las siguientes respuestas posibles:

  • Average cost method

  • LIFO

  • Income tax expense for the period will be the same under all assumptions

  • FIFO

Explicación

Pregunta 43 de 48

1

Given equal circumstances and generally rising costs, which inventory method will increase the tax expense the most?

Selecciona una de las siguientes respuestas posibles:

  • Average cost method

  • LIFO

  • Income tax expense for the period will be the same under all assumptions

  • FIFO

Explicación

Pregunta 44 de 48

1

The specific identification method of costing inventories is used when the

Selecciona una de las siguientes respuestas posibles:

  • company sells large quantities of relatively low cost homogeneous items.

  • company sells a limited quantity of high-unit cost items.

  • physical flow of units cannot be determined.

  • company sells large quantities of relatively low cost heterogeneous items.

Explicación

Pregunta 45 de 48

1

The specific identification method of inventory costing

Selecciona una de las siguientes respuestas posibles:

  • may enable management to manipulate net income.

  • always maximizes a company's net income.

  • always minimizes a company's net income.

  • has no effect on a company's net income.

Explicación

Pregunta 46 de 48

1

The managers of Hong Company receive performance bonuses based on the net income of the firm. Which inventory costing method are they likely to favor in periods of declining prices?

Selecciona una de las siguientes respuestas posibles:

  • LIFO

  • Average cost

  • Physical inventory method

  • FIFO

Explicación

Pregunta 47 de 48

1

In periods of inflation, phantom or paper profits may be reported as a result of using the

Selecciona una de las siguientes respuestas posibles:

  • periodic inventory method.

  • perpetual inventory method.

  • FIFO costing assumption.

  • LIFO costing assumption.

Explicación

Pregunta 48 de 48

1

Selection of an inventory costing method by management does not usually depend on

Selecciona una de las siguientes respuestas posibles:

  • tax effects.

  • the fiscal year end.

  • income statement effects.

  • balance sheet effects.

Explicación

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