acc100 quiz 6

Question
1
The factor which determines whether or not goods should be
included in a physical count of inventory is

legal title.

physical possession.

management’s judgment.

whether or not the purchase price has been paid.

Question
2
Understating
beginning inventory will understate

cost of goods sold.

owner’s equity.

assets.

net income.

Question
3
Inventory
is reported in the financial statements at

the higher-of-cost-or-market.

market.

the
lower-of-cost-or-market.

cost.

Question 4

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Which of
the following statements is correct with respect to inventories?

It is generally good business management to sell the most
recently acquired goods first.

FIFO seldom coincides with the actual physical flow of
inventory.

The FIFO method assumes that the costs of the earliest goods
acquired are the last to be sold.

Under FIFO, the ending inventory
is based on the latest units purchased.

Question 5
In a manufacturing business, inventory that is ready for sale is
called

work in process inventory.

finished goods inventory.

store supplies inventory.

raw materials inventory.

Question 6
Question 6
Eneri Company’s inventory records show the following data:

Units

Unit Cost

Inventory

January 1

10,000

$9.20

Purchases:

June 18

9,000

8.00

November 8

6,000

7.00

A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the
units for $13 each. The company has an effective tax rate of 20%. Eneri uses
the periodic inventory method. Under the LIFO method, cost of goods sold is

$169,200.

$173,040.

$178,000.

$28,000.

: Question
7
Switzer,
Inc. has 8 computers which have been part of the inventory for over two years.
Each computer cost $600 and originally retailed for $900. At the statement
date, each computer has a current replacement cost of $400. How much loss
should Switzer, Inc., record for the year?

$2,400.

$1,600.

$3,200.

$4,000.

Question 8
The
following information was available for Pete Company at December 31, 2014:
beginning inventory $90,000; ending inventory $70,000; cost of goods sold
$984,000; and sales $1,350,000. Pete’s inventory turnover ratio in 2014 was

16.9times.

14.1times.

12.3times.

10.9times.

Question 9
A company purchased inventory as follows:
150 units at $5
350 units at $6
The
average unit cost for inventory is

$5.70.

$6.00.

$5.00.

$5.50.

Question 10
Netta Shutters has the following inventory information.

July 1

Inventory

30 units @ $8.00

8

Purchase

120 units @ $8.30

17

Purchase

60 units @ $8.40

25

Purchase

90 units @ $8.80

A physical count of merchandise inventory on November 30 reveals that there are
90 units on hand. Assume a periodic inventory system is used. Ending inventory
under FIFO is

$1,740.

$738.

$1,794.

$792.