FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Inventories

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Use the following information to answer the following questions. The Boxwood Company sells blankets for $60 each.The following was taken from the inventory records during May.The company had no beginning inventory on May 1. Assuming that the company uses the perpetual inventory system,determine the gross profit for the sale of May 23 using the FIFO inventory cost method.

A) $108
B) $120
C) $72
D) $180

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

During a period of consistently rising prices,the method of inventory that will result in reporting the greatest cost of merchandise sold is

A) FIFO
B) LIFO
C) average cost
D) weighted average

Correct Answer

verified

Show Answer

Question 23

True/False

Review LaterAdd Note

The specific identification inventory method should be used when the inventory consists of identical,low cost units that are purchased and sold frequently.

Assume that three identical units of merchandise are purchased during October,as follows: Assume one unit is sold on October 31 for $28.Determine Cost of Merchandise Sold,Gross Profit,and Ending Inventory under the Average Cost method.

Assume that three identical units of merchandise are purchased during October,as follows: Assume one unit is sold on October 31 for $28.Determine Cost of Merchandise Sold,Gross profit,and Ending Inventory under the FIFO method.

If the perpetual inventory system is used,the account entitled Merchandise Inventory is debited for purchases of merchandise.

When merchandise sold is assumed to be in the order in which the purchases were made,the company is using

When using a perpetual inventory system,the journal entry to record the cost of merchandise sold is:

Safeguarding inventory and proper reporting of the inventory in the books are the reasons for controlling the inventory.

Which of the following measures the length of time it takes to acquire,sell and replace inventory?

The units of an item available for sale during the year were as follows: There are 19 units of the item in the physical inventory at December 31.The periodic inventory system is used.Determine the ending inventory cost using LIFO.

Of the three widely used inventory costing methods (FIFO,LIFO,and average cost),the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

The method of computing inventory that uses records of the selling prices of the merchandise is called

Determine the total value of the merchandise using Net Realizable Value:

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.

Assume that three identical units of merchandise are purchased during October,as follows: Assume one unit is sold on October 31 for $28.Determine Cost of Merchandise Sold,Gross Profit,and Ending Inventory under the LIFO method.

Unsold consigned merchandise should be included in the consignee's inventory.

If a company uses the periodic inventory system to cost its inventory,the gross profit method is a method that can be used to check on theft when the actual inventory is taken by the company.

Garrison Company uses the retail method of inventory costing.They started the year with an inventory that had a retail cost of $45,000.During the year they purchased an inventory with a retail cost of $300,000.After performing a physical inventory,they calculated their inventory cost at retail to be $80,000.The mark up is 100% of cost.Determine the ending inventory at its estimated cost.

Inventory costing methods place primary emphasis on assumptions about