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Short-Term Operating Assets: Inventory
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Intermediate Accounting Study Set 7

Business

Quiz 10 :
Short-Term Operating Assets: Inventory

Quiz 10 :
Short-Term Operating Assets: Inventory

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A perpetual inventory system always provides current information about inventory levels.
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True False
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True

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A periodic inventory system is used by most companies today due to the proliferation of computers.
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True False
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Answer:

False

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Beginning inventory + Net Purchases = Cost of Goods Sold.
Free
True False
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Answer:

False

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The work-in-process inventory is found on the books of a merchandising concern.
True False
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The flow of a manufacturer's product costs through the inventory accounts is ________.
Multiple Choice
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Firms using the periodic inventory system record purchases of inventory with a ________.
Multiple Choice
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Which statement is not correct about perpetual inventory systems?
Multiple Choice
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Charles Company's balance sheet reports Raw Materials Inventory, $570,000; Finished Goods Inventory, $695,000; and total inventories at $1,901,000. What is the value of Work-in-Process Inventory?
Multiple Choice
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Richard Company's financial records report beginning inventory of $535,000; ending inventory of $697,000; and cost of goods sold of $1,396,000. What is the amount of purchases?
Multiple Choice
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Destiny Industries reports beginning inventory of $254,000, purchases of $559,000, and ending inventory of $198,000. What is the cost of goods sold?
Multiple Choice
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Donaldson Corporation uses a periodic inventory system. On January 1, inventory is $253,000. On April 5, Donaldson sells inventory with a selling price of $75,000 on account. The cost of the inventory sold is $50,000. The journal entry (entries) to record the sale is (are) ________.
Multiple Choice
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Dombrose Company uses a perpetual inventory system. On January 1, inventory is $253,000. On April 5, Dombrose sells inventory with a selling price of $75,000 on account. The cost of the inventory sold is $50,000. The journal entry (entries) to record the sale is (are) ________.
Multiple Choice
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The Peggy Ahlers Company uses the perpetual inventory system and the FIFO method. At the end of the fiscal year, December 31, 2015, the company conducted a physical count of the inventory on hand at all warehouses and stores. The FIFO cost of the physical count is $1,005,400. According to the records, ending inventory using FIFO is $1,122,000. Which journal entry is required at December 31, 2015?
Multiple Choice
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A large company uses a perpetual inventory system and a sophisticated computerized system to account for its inventory over time. At the end of the accounting period, the company performs a physical count of the inventory on hand and hires hundreds of workers to carry out this task. Required: 1. Why does the company perform a physical count of inventory? 2. After the physical count of inventory is completed, describe the required journal entry and provide an example.
Essay
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The total cost in dollars of ending inventory is equal to the number of units on hand multiplied by the cost per unit.
True False
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Freight-out costs are included as part of inventory costs.
True False
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Freight-in costs are treated as a selling expense.
True False
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When goods are shipped f.o.b. shipping point, title passes when the goods reach the buyer's dock.
True False
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Purchase returns and purchase discounts are added to purchases to calculate net purchases.
True False
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Purchase returns and purchase discounts are subtracted from purchases to calculate net purchases.
True False
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