Inventory Quiz

( ) inventory system Is a method of updating inventory balances

periodically rather than constantly.

( ) inventory system Is a method of updating inventory balances

continuously

( ) are combined to result in options for accounting the cost of inventory and calculating the cost of goods sold

periodic FIFO

periodic LIFO

periodic average

perpetual FIFO

perpetual LIFO

perpetual average

• Inventory Assumptions & Inventory Systems

• Cash Flow Assumptions & Inventory Systems

• Cash Flow Systems & Inventory Systems

• Inventory Assumption & Cash Flow Chart

Periodic FIFO Uses the: FIFO (first in, first out) cash flow assumption the first (oldest) costs are the first ones to leave the inventory and become the cost of goods sold on the income statement the last ( ) costs will be reported as inventory on the balance sheet.

• first

• best

• most recent

• second

This company periodic FIFO method for their inventory. Total of goods available sale is $540. Ending inventory is $510. What is cost of goods sold?

• 30

• 50

• 100

• 1050

Periodic LIFO Uses the: LIFO (last in, first out) cash flow assumption the ( ) costs are the first ones to

leave inventory and become the cost of goods sold on the income statement the first (oldest) costs will be reported as inventory on the balance sheet

Flora’s Flowers has 16 vases available for sale for the year 2016 and the cost of goods available is $540

The weighted average cost of the vases is ( ).

• $40

• $33.9

• $24.98

• $33.75

Jenny’s Jewels purchases necklaces for $80 and sells them for $100.

Gross profit = ( ) Gross profit percentage = ( )

• 10, 10%

• 35, 35%

• 20, 20%

• 40, 40%

Match vocabulary words to right definitions.

• Inventory

• First items bought are to be the first items sold

• Last In, First Out (LIFO)

• Revenue (income statement) account which represents the sold inventory cost

  during a period

• FIFO

• Method of estimating ending inventory costs and cost of goods sold based on a

  ratio of the historic purchase costs and actual sales revenue

• Gross Profit Method

• Company's merchandise, materials and products which have not been sold,

  representing liquid assets to the company

• Cost of Goods Sold

• Last items purchased are the first to be sold

(a)   method which assigns an average cost to each piece of inventory when it is

sold during the year; average cost is based on the purchase cost

• First In First Out Method
• Last In First Out Method
• Specific Identification Method
• Moving Average Method
• Weighted Average