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Which of the following would be considered merchandise inventory?


A) Work in progress
B) Raw materials
C) Purchased finished goods
D) Cost of goods sold

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Manufacturers have three types of inventory,which include raw materials,work in process,and finished goods,whereas merchandisers have only raw materials inventory.

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Recording a Lower of Cost or Market/Net Realizable Value (LCM/NRV) adjustment involves which of the following generic journal entries?


A) Debit Sales Revenue and credit Inventory.
B) Debit Cost of Goods Sold and credit Inventory.
C) Debit Loss on Goods Sold and credit Inventory.
D) Debit Retained Earnings and credit Inventory.

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The journal entry to record a write-down of inventory from cost to its lower market value includes a:


A) debit to Inventory.
B) credit to Inventory.
C) credit to Sales Revenue.
D) debit to Sales Revenue.

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When a company sells goods,it removes their cost from the balance sheet and reports the cost on the income statement as:


A) Selling Expenses.
B) Cost of Goods Sold.
C) Finished Goods Inventory.
D) Inventory.

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Alphabet Company,which uses the periodic inventory method,purchases different letters for resale.Alphabet had no beginning inventory.It purchased A thru G in January at $4 per letter.In February,it purchased H thru L at $6 per letter.It purchased M thru R in March at $7 per letter.It sold A,D,E,H,J and N in October.There were no additional purchases or sales during the remainder of the year. If Alphabet Company uses the LIFO method,what is the cost of its ending inventory?


A) $24
B) $42
C) $58
D) $76

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Maxell Company uses the FIFO method to assign costs to inventory and cost of goods sold.The company uses a periodic inventory system.Consider the following information: Maxell Company uses the FIFO method to assign costs to inventory and cost of goods sold.The company uses a periodic inventory system.Consider the following information: What amounts would be reported as the cost of goods sold and ending inventory balances for the year? A) Cost of goods sold $625;Ending inventory $175 B) Cost of goods sold $755;Ending inventory $225 C) Cost of goods sold $550;Ending inventory $250 D) Cost of goods sold $600;Ending inventory $200 What amounts would be reported as the cost of goods sold and ending inventory balances for the year?


A) Cost of goods sold $625;Ending inventory $175
B) Cost of goods sold $755;Ending inventory $225
C) Cost of goods sold $550;Ending inventory $250
D) Cost of goods sold $600;Ending inventory $200

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Match the term to the appropriate definition.There are more definitions than terms. -Work in Process Inventory


A) Inventory costing method that identifies the cost of the specific item that was sold.
B) Inventory costing method that assumes that the costs of the first goods purchased are the costs of the first goods sold.
C) The difference between net sales and cost of goods sold.
D) The inventory that starts the manufacturing process.
E) Inventory items being transported.
F) Consists of products acquired in a finished condition,ready for sale without further processing.
G) A valuation rule that requires Inventory to be written down when its market value falls below its cost.
H) The expense that follows directly after Net Sales on a multiple step income statement.
I) Beginning Inventory + Purchases - Cost of Goods Sold
J) Goods a company is holding on behalf of the goods' owner.
K) Inventory costing method that assumes that the costs of the last goods purchased are the costs of the first goods sold.
L) Requires that if LIFO is used on the income tax return,it also must be used in financial statement reporting.
M) Beginning Inventory + Purchases - Ending Inventory
N) Goods that are in the process of being manufactured.
O) Inventory costing method that uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.
P) Goods that are held for sale in the normal course of business or are used to produce other goods for sale.
Q) How many times (on average) that inventory has been bought or sold.
R) Inventory that was in process and now is completed and ready for sale.
S) A measure of the average number of days from the time inventory is bought to the time it is sold.

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Bonnie Denim Company sells blue jeans.Last year,skinny jeans were fashionable;this year,relaxed-fit jeans are in style.The company has 940 units of skinny jeans with a cost of $38 per unit and a market value of $34 per unit.The inventory also includes 2,360 units of relaxed-fit jeans with a cost of $33 per unit and a market value of $39 per unit. Required: Prepare the journal entry,if any,that is required to adjust the Inventory account.(If no entry is required for a transaction/event,select "No Journal Entry Required" in the first account field. )

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Cost of goods sold [...

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Eaton Electronics uses a periodic inventory system.On March 31,Eaton has two plasma TVs on hand at a cost of $1,500 each (serial numbers 11534892 and 11534894) .In April,the company purchases four more identical TVs from Toshiba for $1,450 each (serial numbers 11542631 through 11542634) .In May,the company purchases five more identical TVs for $1,600 each (serial numbers 11550964 through 11550968) .In June,Eaton sells two of these TVs (serial numbers 11534894 and 11542631) .There were no additional purchases or sales during the remainder of the year. Eaton Electronics uses the FIFO method.What is the cost of its ending inventory?


A) $13,850
B) $13,800
C) $13,760
D) $13,600

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If inventory costs have been falling during the year,which cost method results in the highest gross profit for the year?


A) Specific identification
B) Weighted average cost
C) LIFO
D) FIFO

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Which of the following statements about the calculations used for the weighted average inventory costing method is correct?


A) Under the weighted average cost method,if the goods in inventory were purchased at three different prices,the three different prices would be added and then divided by three to find the weighted average cost per unit.
B) When the weighted average inventory costing method is used,ending inventory and cost of goods sold are calculated using different costs per unit.
C) There is no difference in the calculations under the weighted average method whether a perpetual or periodic inventory system is used.
D) The weighted-average method will produce an inventory cost which is between the results of FIFO and LIFO inventory costing methods.

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Larkspur Co.had cost of goods sold of $3,600.If beginning inventory was $3,780 and ending inventory was $900,Larkspur's purchases must have been:


A) $720.
B) $1,080.
C) $2,880.
D) $6,480.

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Willow Company had no beginning inventory.The company purchases 900 units of inventory in January at $5 each,1,500 units at $4 each in August,and 600 units at $6 each in November.The company sells 450 units during the year.Willow uses a periodic inventory system and the LIFO inventory costing method.What is the cost of goods sold?


A) $1,800
B) $2,802
C) $2,250
D) $2,700

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Charter Company,which uses the perpetual inventory method,purchases different letters for resale.Character had a beginning inventory comprised of seven units at $4 per unit.The company purchased five units at $6 per unit in February,sold seven units in October,and purchased two units at $7 per unit in December. If Charter Company uses the LIFO method,what is the cost of goods sold for the year?


A) $38
B) $34
C) $44
D) $72

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Probes,Inc.wrote down its inventory to the lower replacement value.The effect on Probes' accounting equation includes a(n) :


A) increase in assets.
B) decrease in assets.
C) increase in liabilities.
D) increase in stockholders' equity.

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Match the term to the appropriate definition.There are more definitions than terms. -Specific Identification


A) Inventory costing method that uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.
B) The inventory that starts the manufacturing process.
C) Inventory costing method that assumes that the costs of the last goods purchased are the costs of the first goods sold.
D) Beginning Inventory + Purchases - Ending Inventory
E) Inventory costing method that identifies the cost of the specific item that was sold.
F) A valuation rule that requires Inventory to be written down when its market value falls below its cost.
G) Goods that are held for sale in the normal course of business or are used to produce other goods for sale.
H) The difference between net sales and cost of goods sold.
I) Inventory that was in process and now is completed and ready for sale.
J) Beginning Inventory + Purchases - Cost of Goods Sold
K) Requires that if LIFO is used on the income tax return,it also must be used in financial statement reporting.
L) Goods that are in the process of being manufactured.
M) The expense that follows directly after Net Sales on a multiple step income statement.
N) Consists of products acquired in a finished condition,ready for sale without further processing.
O) Inventory costing method that assumes that the costs of the first goods purchased are the costs of the first goods sold.
P) A measure of the average number of days from the time inventory is bought to the time it is sold.
Q) Inventory items being transported.
R) Goods a company is holding on behalf of the goods' owner.
S) How many times (on average) that inventory has been bought or sold.

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Which inventory costing method assumes that inventory costs flow out in the opposite order from which the goods were purchased?


A) FIFO
B) LIFO
C) Weighted average
D) Specific identification

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Which of the following would not be affected by the choice of an inventory costing method (that is,choosing between FIFO,LIFO,weighted average,and specific identification) ?


A) Sales revenue
B) Cost of goods sold
C) Gross profit
D) Net income

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If inventory is sold with terms of FOB shipping point,the goods belong to the customer while in transit.

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