Test 6 - Chapter 6 Costing Test

All of the following are inventory costing methods except for

This method of accounting for inventory assumes that the units acquired earliest are sold or used first

This method of accounting for inventory assumes that the units acquired most recently are sold or used first

The cost at which an inventory item could be acquired today is the

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

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

The primary goals of inventory management include

A company just starting in business purchased three inventory items at the following prices: first purchase, $80; second purchase, $95; third purchase, $85. If the company sold two units for a total of $200 and used FIFO costing, the gross profit for the period would be

Which of the following would not be affected by the choice of costing methods?

In periods of rising prices, the inventory method which results in the highest gross profit is

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

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

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

In periods of rising prices, LIFO will produce

Considerations that affect the selection of an inventory costing method do not include:

The LCM rule for inventory is an example of the application of

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

Wonder Corp. failed to record the purchase of merchandise on account. As a result, ending inventory was understated. What is the effect of these errors on assets, liabilities, capital, and net income, respectively?

The specific ID method would probably be most appropriate for which of the following goods?

Gerber Department Store utilizes the retail inventory method. Gerber's beginning inventory cost $140 000 and retailed for $280 000. Purchases for the period amounted to $390 000 and were priced to sell at twice that amount. Sales for the period, at retail, were $600 000. How much is the cost of ending inventory?

Which inventory costing method generally results in the most recent costs being assigned to ending inventory?

The 2014 records of Thompson Co. showed beginning inventory, $6 000; cost of goods sold, $14 000; and ending inventory, $8 000. The cost of purchases for 2014 was

Which of the following statements is true with regards to all inventory costing methods?

An adjustment to ending inventory under the LCM rule would be most likely to be recorded by a company that sells

When the LCM rule requires an inventory adjustment

A rising balance in the inventory account and a falling inventory turnover ratio implies that the inventory buildup is occurring because

Which of the following companies would be least concerned about a low inventory ratio?

Because LIFO uses older costs for inventory, in times of rising prices:

Which of the following inventory cost flow methods would an auto dealership most likely use for its new car sales?

In an inflationary environment in Canada, which inventory cost flow method will require the smallest cash payment for income taxes?

Carrington Company applies the LCM rule to each individual item in its ending inventory. The company determines that it must write down its inventory by $4 000. Which of the following answers reflects how this would effect the statements? (Assets = Liabilities + Equity; Revenue - Expenses = Net Income)

An overstatement of ending inventory results in an

The following info is from the 2014 accounting records of Odom Company: Sales Revenue = $625 000; Beginning Inventory = $254 000; Purchases = $366 000; Historical Gross Profit Margin = 40%
What is the estimated gross profit?

The ? principle states that a company should use the same accounting methods and procedures from one period to the next.

An undiscovered inventory error usually affects:

When using the FIFO inventory method, the most recent inventory costs will be found on the

Use the following info for this question: Beginning Inventory: 10 units, $10 each; January 20 Purchase: 10 units, $20 each; January 30 Purchase: 5 units, $30 each. 15 of the 25 are sold. Calculate cost of goods sold using FIFO.

Use the following info for this question: Beginning Inventory: 10 units, $10 each; January 20 Purchase: 10 units, $20 each; January 30 Purchase: 5 units, $30 each. 15 of the 25 are sold. Calculate cost of goods sold using LIFO.

Use the following info for this question: Beginning Inventory: 10 units, $10 each; January 20 Purchase: 10 units, $20 each; January 30 Purchase: 5 units, $30 each. 15 of the 25 are sold. Calculate cost of goods sold using average cost.

In a period of rising prices, all of the following statements are true regarding LIFO except:

In a period of falling prices, all of the following statements are true regarding FIFO except:

Use the following information:
May 1 Beginning Inventory: 50 units @ $20
May 7 Purchases: 40 units @ $25
May 18 Sales: 60 units
May 22 Purchases: 10 units @ $30
May 29 Sales: 25 units
What is the ending inventory using the LIFO method?

Use the following information:
May 1 Beginning Inventory: 50 units @ $20
May 7 Purchases: 40 units @ $25
May 18 Sales: 60 units
May 22 Purchases: 10 units @ $30
May 29 Sales: 25 units
What is the ending inventory using the AVG cost method?

Use the following information:
May 1 Beginning Inventory: 50 units @ $20
May 7 Purchases: 40 units @ $25
May 18 Sales: 60 units
May 22 Purchases: 10 units @ $30
May 29 Sales: 25 units
What is the ending inventory using the FIFO method?

Use the following info to compute gross profit. Sales price of merchandise sold to customers is $10 000, beginning inventory $1 000, inventory purchases $4 000, and cost of goods sold $3 000.

Errors may arise in the process of counting inventory. Assume some inventory is accidentally counted twice. All of the following statements are true except:

Which inventory method generally best follows the matching rule?

During periods of declining prices, which inventory method probably will result in the lowest ending inventory?

Insurance companies often verify the extent of inventory lost or destroyed by applying the

Which of the following statement is true of inventory errors?