Question 1

Calculate the ending inventory under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Round to four decimal places.  Sales for April: 115 units
a) ________ FIFO
b) ________ LIFO
c) ________ Weighted-average

Accepted Answer

Available for sale = 60 + 80 + 30 = 170;...

Question 2

Under the specific invoice method, costs are matched with individual sale items.

Accepted Answer

A) True 
 B)False

Question 3

The principle of consistency states that:

Accepted Answer

A)   changes in accounting methods should occur from one fiscal period to the next.
B)   a company cannot change from one inventory valuation method to another.
C)   a company should switch from LIFO to FIFO every other period.
D)   by using the same inventory method from one fiscal period to another, the financial statements are more meaningful.E) None of the above
F) B) and C)

Question 4

Under the ________ inventory system, cost of goods sold and the amount of merchandise inventory on hand are updated at the end of the accounting period.

Accepted Answer

The answer of Under the ________ inventory system, cost of...

Question 5

Barry's Books uses a periodic inventory system. Barry's Books sold 40 copies of Helpful Hints during September. Other data for September include:  Ending inventory under the FIFO method is:

Accepted Answer

A)   $500.
B)   $560.
C)   $640.
D)   $625.E) A) and B)
F) All of the above

Question 6

The perpetual inventory system is a system which:

Accepted Answer

A)   updates inventory only at the end of each period.
B)   uses only LIFO method.
C)   needs a physical inventory taken.
D)   Both A and B are correct.E) B) and C)
F) All of the above

Question 7

Sterling Supply uses a periodic inventory system. Sterling Supply sold 35 globes during March. Other data for March include:  Round per unit cost to two decimal places. Ending inventory under the weighted-average method is:

Accepted Answer

A)   $358.
B)   $270.
C)   $417.
D)   $505.E) B) and D)
F) B) and C)

Question 8

Which of the following should be included in inventory costs?

Accepted Answer

A)   Goods that are not resalable
B)   Goods on consignment to you
C)   Goods for sale at a value that is greater than cost
D)   Both A and B are correct.E) None of the above
F) C) and D)

Question 9

Indicate the account(s)  to be debited and credited to record the following transactions.

-Customer returned goods purchased on credit - Perpetual
Debit ________ & ________ Credit ________ & ________

Accepted Answer

A)   Cash
B)   Accounts receivable
C)   Merchandise inventory
D)   Supplies
E)   Accounts payableF)  SalesG)  Sales returns and allowancesH)  Sales discountsI)  Cost of goods soldJ)  PurchasesK)  Purchase returns and allowancesL) Purchase discountsM)  Freight-inN) D) and H)
O) None of the above

Question 10

The company returned $500 of damaged merchandise purchased on credit. The entry to record this under the periodic inventory system is:

Accepted Answer

A)   debit Cost of Goods Sold $500; credit Accounts Payable $500.
B)   debit Merchandise Inventory $500; credit Accounts Payable $500.
C)   debit Accounts Payable $500; credit Purchases Returns and Allowances $500.
D)   debit Accounts Payable $500; credit Merchandise Inventory $500.E) A) and D)
F) B) and C)

Question 11

The journal entry to record the return of a purchase of inventory under the periodic system includes a:

Accepted Answer

A)   debit to Sales.
B)   credit to Purchases Returns and Allowances.
C)   credit to Merchandise Inventory.
D)   credit to Sales.E) B) and D)
F) All of the above

Question 12

An incorrect calculation of ending inventory affects:

Accepted Answer

A)   cost of goods sold.
B)   gross profit.
C)   net income.
D)   All of the above are correct.E) A) and D)
F) None of the above

Question 13

Indicate the account(s)  to be debited and credited to record the following transactions.

-Paid for freight charges. - Perpetual
Debit ________ Credit ________

Accepted Answer

A)   Cash
B)   Accounts receivable
C)   Merchandise inventory
D)   Supplies
E)   Accounts payableF)  SalesG)  Sales returns and allowancesH)  Sales discountsI)  Cost of goods soldJ)  PurchasesK)  Purchase returns and allowancesL) Purchase discountsM)  Freight-inN) A) and I)
O) C) and F)

Question 14

Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Use four decimal places.  Sales for March: 95 units
a) ________ FIFO
b) ________ LIFO
c) ________ Weighted-average

Accepted Answer

a) FIFO (50 × $25) + (45 × $30...

Question 15

Mack Industries uses the perpetual inventory system. What is the entry to record a $450 merchandise purchase on account from Nickel Corporation?

Accepted Answer

A)   Debit Accounts Payable for $450; credit Sales for $450.
B)   Debit Purchases for $450; credit Accounts Payable for $450.
C)   Debit Purchases for $450; credit Merchandise Inventory for $450.
D)   Debit Merchandise Inventory for $450; credit Accounts Payable for $450.E) C) and D)
F) A) and D)

Question 16

American Lumber has the following company information for October: goods available for sale at cost are $24,000, retail is $36,500, and sales at retail equal $28,500. Bert has a normal gross profit of 20%. The cost of estimated ending inventory under the retail method is: (Round any percentages to two decimal places, X.XX%, and your final answer to the nearest dollar.)

Accepted Answer

A)   $5,260.
B)   $6,246.
C)   $6,400.
D)   $1,600.E) A) and B)
F) B) and C)

Question 17

Joe owns an auto parts store called Joe's Auto Care. The following transactions took place during July of the current year.
July 8 Purchased merchandise on account from Wheeler Auto for $6,000
July 10 Paid freight charges of $400 on merchandise purchases on the 8th.
July 12 Sold merchandise on account to Lancaster Auto Sales for $5,500.
The cost of the merchandise was $3,500
July 16 Received a credit memo from Wheeler for merchandise returned, $900
July 22 Issued a credit memo to Lancaster Auto Sales for merchandise returned, $1,000.
The cost of the merchandise is $550.
Journalize the above transactions using the perpetual inventory system.

Accepted Answer

The answer of Joe owns an auto parts store called...

Question 18

An advantage of the FIFO method is that:

Accepted Answer

A)   the figure for ending inventory is made up of current costs on the income statement.
B)   the cost flow tends to follow the physical flow.
C)   it matches current selling prices and current costs.
D)   Both A and B are correct.E) B) and C)
F) A) and D)

Question 19

The ending inventory for this year is overstated. This error would cause:

Accepted Answer

A)   the period's net income to be overstated.
B)   the period's net income to be understated.
C)   the period end assets to be understated.
D)   None of these is correct.E) B) and C)
F) None of the above

Question 20

The following transactions took place during August of the current year for Roadhouse School Supplies.
August 6 Purchased merchandise on account from Abe's Papermill for $10,000.
August 8 Paid freight charges of $600 on merchandise purchased on the 6th.
August 12 Sold merchandise on account to Johnson Elementary for $2,500.
The cost of the merchandise was $500.
August 17 Received a credit memo from Abe's Papermill for merchandise returned, $1,000
August 21 Issued a credit memo to Johnson Elementary for merchandise returned, $400.
The cost of the merchandise is $150.
Journalize the above transactions using the periodic inventory system.

Accepted Answer

The answer of The following transactions took place during August...

Exam 15: Accounting for Merchandise Inventory

Mack Industries uses the perpetual inventory system. What is the entry to record a $450 merchandise purchase on account from Nickel Corporation?

Correct Answer
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Correct Answer
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The company returned $500 of damaged merchandise purchased on credit. The entry to record this under the periodic inventory system is:

Correct Answer
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Barry's Books uses a periodic inventory system. Barry's Books sold 40 copies of Helpful Hints during September. Other data for September include: Ending inventory under the FIFO method is:

Correct Answer
verified

An advantage of the FIFO method is that:

Correct Answer
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An incorrect calculation of ending inventory affects:

Correct Answer
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The journal entry to record the return of a purchase of inventory under the periodic system includes a:

Correct Answer
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Which of the following should be included in inventory costs?

Correct Answer
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Indicate the account(s) to be debited and credited to record the following transactions. -Customer returned goods purchased on credit - Perpetual Debit & Credit &

Correct Answer
verified

Indicate the account(s) to be debited and credited to record the following transactions. -Paid for freight charges. - Perpetual Debit Credit

Correct Answer
verified

Correct Answer
verified

Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Use four decimal places. Sales for March: 95 units a) FIFO b) LIFO c) Weighted-average

Correct Answer
verified
a) FIFO (50 × $25) + (45 × $30...
View Answer

The principle of consistency states that:

Correct Answer
verified

Under the ________ inventory system, cost of goods sold and the amount of merchandise inventory on hand are updated at the end of the accounting period.

Correct Answer
verified

Correct Answer
verified

Calculate the ending inventory under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Round to four decimal places. Sales for April: 115 units a) FIFO b) LIFO c) Weighted-average

Correct Answer
verified
Available for sale = 60 + 80 + 30 = 170;...
View Answer

Under the specific invoice method, costs are matched with individual sale items.

Correct Answer
verified

Sterling Supply uses a periodic inventory system. Sterling Supply sold 35 globes during March. Other data for March include: Round per unit cost to two decimal places. Ending inventory under the weighted-average method is:

Correct Answer
verified

The ending inventory for this year is overstated. This error would cause:

Correct Answer
verified

The perpetual inventory system is a system which:

Correct Answer
verified

Exam 15: Accounting for Merchandise Inventory

Mack Industries uses the perpetual inventory system. What is the entry to record a $450 merchandise purchase on account from Nickel Corporation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The company returned $500 of damaged merchandise purchased on credit. The entry to record this under the periodic inventory system is:

Correct AnswerverifiedShow Answer

Barry's Books uses a periodic inventory system. Barry's Books sold 40 copies of Helpful Hints during September. Other data for September include: Ending inventory under the FIFO method is:

Correct AnswerverifiedShow Answer

An advantage of the FIFO method is that:

Correct AnswerverifiedShow Answer

An incorrect calculation of ending inventory affects:

Correct AnswerverifiedShow Answer

The journal entry to record the return of a purchase of inventory under the periodic system includes a:

Correct AnswerverifiedShow Answer

Which of the following should be included in inventory costs?

Correct AnswerverifiedShow Answer

Indicate the account(s) to be debited and credited to record the following transactions. -Customer returned goods purchased on credit - Perpetual Debit ________ & ________ Credit ________ & ________

Correct AnswerverifiedShow Answer

Indicate the account(s) to be debited and credited to record the following transactions. -Paid for freight charges. - Perpetual Debit ________ Credit ________

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Use four decimal places. Sales for March: 95 units a) ________ FIFO b) ________ LIFO c) ________ Weighted-average

Correct Answerverifieda) FIFO (50 × $25) + (45 × $30...View AnswerShow Answer

The principle of consistency states that:

Correct AnswerverifiedShow Answer

Under the ________ inventory system, cost of goods sold and the amount of merchandise inventory on hand are updated at the end of the accounting period.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Calculate the ending inventory under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Round to four decimal places. Sales for April: 115 units a) ________ FIFO b) ________ LIFO c) ________ Weighted-average

Correct AnswerverifiedAvailable for sale = 60 + 80 + 30 = 170;...View AnswerShow Answer

Under the specific invoice method, costs are matched with individual sale items.

Correct AnswerverifiedShow Answer

Sterling Supply uses a periodic inventory system. Sterling Supply sold 35 globes during March. Other data for March include: Round per unit cost to two decimal places. Ending inventory under the weighted-average method is:

Correct AnswerverifiedShow Answer

The ending inventory for this year is overstated. This error would cause:

Correct AnswerverifiedShow Answer

The perpetual inventory system is a system which:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Indicate the account(s) to be debited and credited to record the following transactions. -Customer returned goods purchased on credit - Perpetual Debit & Credit &

Correct Answer
verified

Indicate the account(s) to be debited and credited to record the following transactions. -Paid for freight charges. - Perpetual Debit Credit

Correct Answer
verified

Correct Answer
verified

Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Use four decimal places. Sales for March: 95 units a) FIFO b) LIFO c) Weighted-average

Correct Answer
verified
a) FIFO (50 × $25) + (45 × $30...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Calculate the ending inventory under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Round to four decimal places. Sales for April: 115 units a) FIFO b) LIFO c) Weighted-average

Correct Answer
verified
Available for sale = 60 + 80 + 30 = 170;...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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