Worksheetsquiz pesent t2
Total questions: 12
Worksheet time: 4mins
Goods on consignment:
Are goods shipped by the owner to the consignee who sells the goods for the owner.
Are reported in the consignee's books as inventory
Are goods shipped to the consignor who sells the goods for the owner.
Are not reported in the consignor's inventory since they do not have possession of the inventory.
Are always paid for by the consignee when they take possession.
Days' sales in inventory is calculated as:
Ending inventory divided by cost of goods sold.
Cost of goods sold divided by ending inventory.
Ending inventory divided by cost of goods sold times 365.
Cost of goods sold divided by ending inventory times 365.
Ending inventory times cost of goods sold.
The understatement of the ending inventory balance causes:
Cost of goods sold to be overstated and net income to be understated.
Cost of goods sold to be overstated and net income to be overstated.
Cost of goods sold to be understated and net income to be understated.
Cost of goods sold to be understated and net income to be overstated.
Cost of goods sold to be overstated and net income to be correct.
A company uses the periodic inventory system and had the following activity during the current monthly period.
November 1: Beginning inventory of 100 units at $20
November 5: Purchased 100 units at $22
November 8: Purchased 50 units at $23
November 16: Sold 200 units at $45
November 19: Purchased 50 units at $25
In a periodic inventory system, using the weighted-average inventory method, the company's ending inventory would be:
$2,000.
$2,200.
$2,250.
$2,400.
The inventory valuation method that results in the lowest taxable income in a period of inflation is:
LIFO method.
FIFO method.
Weighted-average cost method.
Specific identification method.
Gross profit method.
What is the inventory turnover ratio?
Used to analyze profitability.
Used to measure liquidity.
Reveals how many times a company turns over (sells) its merchandise inventory
Validates the acid-test ratio.
Calculation depends on the company's inventory valuation method.
Management must confront which of the following considerations when accounting for inventory:
Costing (valuation) method.
Inventory system (perpetual or periodic).
Items to be included and their prices.
Use of lowest cost, market, or other estimates.
All of the above.
Damaged and obsolete goods:
Never included in inventory.
Included in inventory at their full cost.
Included in inventory at their net realizable value.
Should be disposed of immediately.
Assigned a value of zero.
Goods in transit are included in a purchaser's inventory:
At any time during transit.
When the purchaser is responsible for paying freight charges.
When the supplier is responsible for freight charges.
If the goods are shipped FOB destination.
After the half-way point between the buyer and seller.
Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method.
June 1 Beginning inventory, 15 units at $20 each
June 15 Sale of 6 units for $50 each
June 29 Purchase of 8 units at $25 each
The cost of the ending inventory is
$200.
$220.
$380.
$275.
$300.
Acceptable inventory methods include:
LIFO method.
FIFO method.
Specific identification method.
Weighted average method.
All of these methods.
The inventory valuation method that identifies each item in ending inventory with a specific purchase and invoice is the:
Weighted average cost method.
First-in, first-out method.
Last-in, first-out method.
Specific identification method.
Retail inventory method.
