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Exam 6: Inventories

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Question 41

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Beginning inventory,purchases,and sales data for tennis rackets are as follows: ​ Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of goods sold and ending inventory using LIFO.

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Question 42

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Which document establishes an initial record of the receipt of the inventory?​

A) ​receiving report
B) ​vendor's invoice
C) ​purchase order
D) ​petty cash voucher

E) A) and C)
F) A) and D)

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Question 43

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During the taking of its physical inventory on December 31,Almond Supplies Company incorrectly counted its inventory as $545,000 instead of the correct amount of $554,000.Indicate the effects of the misstatement on Almond Supplies Company's balance sheet and income statement for the year ended December 31.

Under the periodic inventory system,a physical inventory is taken to determine the cost of the inventory on hand and the cost of the goods sold.

Beginning inventory,purchases,and sales for an inventory item are as follows: ​ ​ The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year.What is the total cost of ending inventory according to FIFO?

The firm uses the periodic system,and there are 20 units of the commodity on hand at the end of the year.What is the amount of inventory at the end of the year rounded to nearest dollar according to the average cost method?

If Beginning Inventory (BI) + Purchases (P) - Ending Inventory (EI) = Cost of Goods Sold (COGS) ,an equivalent equation can be written as​

FIFO is the inventory costing method that follows the physical flow of the goods.

The three inventory costing methods will normally each yield different amounts of net income.

The value of ending inventory rounded to nearest dollar using average cost is:

If Addison uses FIFO,the cost of the ending inventory on September 30 is

When inventory is shown on the balance sheet,both the method of determining the cost of the inventory and the method of valuing the inventory should be shown.

Beginning inventory,purchases,and sales data for tennis rackets are as follows: ​ Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of goods sold and ending inventory using FIFO. ​

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item,by major classification of inventory,or by the total inventory.

One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

If a company values inventory at the lower of cost or market,which of the following is the value of inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole.

If a company mistakenly counts more items during a physical inventory than actually exist,how will the error affect their bottom line?

Based on the following information: compute (a)inventory turnover; (b)average daily cost of goods sold; and (c)number of days' sales in inventory for the current year.Use a 365-day year.(d)If an inventory turnover of 12 is average for the industry,how is this company doing?

Too much inventory on hand

If a manufacturer ships merchandise to a retailer on consignment,the unsold merchandise should be included in the inventory of the