Question 1 Which of the following methods is


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Question 1 Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items? Answer FIFO LIFO average specific identification 2 points Question 2 Which of the following measures the relationship between cost of merchandise sold and the amount of inventory carried during the period? Answer inventory turnover number of days’ sales in inventory retail method of inventory costing gross profit method of inventory costing 2 points Question 3 Which of the following is used to analyze the efficiency and effectiveness of inventory management? Answer inventory turnover only number of days’ sales in inventory only both inventory turnover and number of days’ sales in inventory neither inventory turnover or number of days’ sales in inventory 2 points Question 4 When merchandise sold is assumed to be in the order in which the purchases were made, the company is using Answer first-in, last-out last-in, first-out first-in, first-out average cost 2 points Question 5 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. Date Product Z Units Cost May 3 Purchase 5 $30 May 10 Sale 3 May 17 Purchase 10 $34 May 20 Sale 6 May 23 Sale 3 May 30 Purchase 10 $40 Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the FIFO inventory cost method. Answer $250 $180 $196 $204 2 points Question 6 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. Date Product Z Units Cost May 3 Purchase 5 $30 May 10 Sale 3 May 17 Purchase 10 $34 May 20 Sale 6 May 23 Sale 3 May 30 Purchase 10 $40 Assuming that the company uses the perpetual inventory system, determine the ending inventory value for the month of May using the FIFO inventory cost method. Answer $494 $502 $422 $520 2 points Question 7 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. Date Product Z Units Cost May 3 Purchase 5 $30 May 10 Sale 3 May 17 Purchase 10 $34 May 20 Sale 6 May 23 Sale 3 May 30 Purchase 10 $40 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. Answer $78 $90 $102 $180 2 points Question 8 Too much inventory on hand Answer reduces solvency increases the cost to safeguard the assets increases the losses due to price declines all of the above 2 points Question 9 The inventory costing method that reports the most current prices in ending inventory is Answer FIFO Specific identification LIFO Average cost 2 points Question 10 The inventory costing method that reports the earliest costs in ending inventory is Answer FIFO LIFO Average cost Specific identification 2 points Question 11 Taking a physical count of inventory Answer is not necessary when a periodic inventory system is used should be dine near year-end has no internal control relevance is not necessary when a perpetual inventory system is used 2 points Question 12 Merchandise inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error? Answer net income is understated net income is overstated cost of merchandise sold is understated merchandise inventory reported on the balance sheet is overstated 2 points Question 13 Kristin’s Boutiques has identified the following items for possible inclusion in its December 31, 2010 inventory. Which of the following would not be included in the year end i…

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