Accounting exam 6-8 prep

When is physical inventory usually taken?

• When the company has its greatest amount of inventory.

• When a limited number of goods are being sold or received.

• At the end of the company’s fiscal year

• Both when a limited number of goods are being sold or received, and at the end of the company’s fiscal year.

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

• Goods held on consignment from another company.

• Goods shipped on consignment to another company.

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

• None of the answer choices is correct.

Organize these options into their proper normal balance side

Groups:

(a) Debit

,

(b) Credit

• Meals and Entertainment Expense

• Property Taxes Payable

• Sales Commissions Payable

• Postage Expense

• Freight Out

• Petty Cash

Inventory costing method that assumes that the costs of the earliest goods purchased are the first to be recognized as cost of goods sold.

• FIFO

• LIFO

• Average-Cost

Inventory costing method that assumes the costs of the latest units purchased are the first to be allocated to cost of goods sold.

• FIFO

• LIFO

• Average-cost

Inventory costing method that uses the weighted-average unit cost to allocate to ending inventory and cost of goods sold the cost of goods available for sale.

• FIFO

• LIFO

• Average-cost

If 9,000 units are on hand at December 31, the cost of the ending inventory under FIFO is

• $99,000

• $108,000

• $113,000

• $117,000

If 9,000 units are on hand at December 31, the cost of the ending inventory under LIFO is

• $99,000

• $108,000

• $113,000

• $100,000

If Davidson has 7,000 units on hand at December 31, the cost of ending inventory under the average-cost method is

• $84,000

• $70,000

• $56,000

• $75,250

In periods of rising costs, LIFO will produce

• higher net income than FIFO

• the same net income as FIFO

• lower net income than FIFO

• higher net income than average-cost