Quiz 6-10

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.

• All of the above should be included.

Cost of goods available for sale consists of two elements: beginning inventory and

• ending inventory.

• cost of goods purchased.

• cost of goods sold.

• All of the above.

Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods.

• True

• False

Goods out on consignment should be included in the inventory of the consignor.

• True

• False

All inventories are reported as current assets on the statement of financial position.

• True

• False

The specific identification method of inventory valuation is desirable when a company sells a large number of low-unit cost items.

• True

• False

The factor which determines whether goods in transit should be included in a physical count of inventory is

• physical possession.

• legal title.

• management's judgment.

• whether or not the purchase price has been paid.

What is Queen's Cost of goods available for sale?

• £38,500.

• £142,400.

• £377,400.

• cannot be determined.

Answer explanation

O/I+Purchases = 135,000+102,000+140,400= 377,400

What is Queen's Cost of good sold of sale made in July 7 using FIFO assumption?

• £112.5

• £127,500

• £135,000

• £102,000

Answer explanation

:COSG (7/7) = 25*4.5= 112.5

Tinker Bell Company has the following: Inventory (Jan. 1): 8,000 units at $11. Purchase (June 19) 13,000 units at $12. Purchase (Nov. 8) 5,000 units at $13. What is weighted average cost of inventory at June 19 (perpetual inventory)?

• $11.5

• $12

• $11.62

• $11.88

Answer explanation

:[(8,000*$11) + (13,000*$12)]/(8,000+13,000)= $11.62