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ax

The two most widely used techniques for identify the price of inventory are

A. Pistol profit and average

B. FIFO and LIFO

C. LIFO and average

D. FIFO and also average

Definition B. FIFO and also LIFO
Term

Which that the following companies would certainly be an ext likely to use the details identification perform costing method?

A. Wal-Mart

B. Best Buy

C. Gordon’s Jewelers

D. Lowe’s

Definition C. Gordon’s Jewelers
Term

The adhering to lots of a certain commodity were accessible for sale during the year:

 

Beginning list 5 devices at $61

First acquisition 15 systems at $63

Second purchase 10 units at $74

Third purchase 10 devices at $77

 

The firm supplies the routine system and also there are 20 devices of the commodity ~ above hand at the finish of the year. What is the quantity of cost of an excellent sold for the year follow to the average cost method?

 

A. $1,375

B. $1,510

C. $1,380

D. $1,250

Definition

C. $1,380

<(5 x $61) + (15 x $63) + (10 x $74) + (10 x $77)> / (5 + 15 + 10 + 10) = $69 x 20 = $1,380 

Term

The adhering to lots that a certain commodity were obtainable for sale throughout the year:

Beginning inventory 5 systems at $61

First purchase 15 devices at $63

Second purchase 10 devices at $74

Third purchase 10 devices at $77

The firm supplies the routine system and also there space 20 devices of the commodity top top hand at the finish of the year. What is the amount of price of goods sold because that the year follow to the LIFO method?

A. $1,250

B. $1,375

C. $1,510

D. $1,380

Definition

C. $1,510

(10 X 77) + (10 X 74) = 1,510

*Side Note: LIFO - quantity of price of products Sold - Downward

Second purchase 10 devices at $74

Third acquisition 10 systems at $77

Term

The an approach of computer inventory that provides records the the marketing prices that the merchandise is called

A. First-in, first-out

B. Median cost

C. Last-in, first-out

D. Sleeve method

Definition D. Retail method
Term

Which of the complying with is provided to analysis the efficiency and effectiveness of list management?

A. Inventory turnover only

B. Number of days’ sales in inventory only

C. Both inventory turnover and number of days’ sales in inventory

D. No inventory turnover or number of days’ sales in inventory

Definition C. Both inventory sales and variety of days’ sales in inventory
Term

During a duration of fallout’s prices, which of the following inventory methods typically results in the lowest balance sheet amount because that inventory.

You are watching: The three inventory costing methods will normally each yield different amounts of net income.

A. Median method

B. LIFO method

C. FIFO method

D. Deserve to not phone call without more information

Definition C. FIFO method
Term

A physics inventory need to be taken in ~ the finish of every month.

True

 

False

Definition False
Term

FIFO is the perform costing an approach that adheres to the physical flow of the goods.

True

 

False

Definition True
Term

The lower-of-cost-or-market technique of identify the value of finishing inventory deserve to be used on things by item, by major classification of inventory, or by the complete inventory.

True

 

False

Definition True
Term

Inventory controls start once the merchandise is shelved in the keep area.

True

 

False

Definition False
Term

Of the 3 widely offered inventory costing techniques (FIFO, LIFO, and average cost), the LIFO an approach of costing inventory assumes costs are charged based on the many recent to buy first.

True

 

False

Definition True
Term

One that the 2 internal regulate procedures end inventory is to appropriately report list on the financial statements.

True

 

False

Definition True
Term

The three inventory costing techniques will typically each productivity different amounts of network income.

True

 

False

Definition True
Term

If a agency mistakenly counts much less items during a physics inventory 보다 actually exist, just how will the error affect the cost of merchandise sold?

 

A. Understated

B. Overstated

C. No change.

D. Only inventory is affected.

Definition B. Overstated
Term

On the basis of the complying with data, what is the estimated expense of the merchandise perform on might 31 using the retail method?

price Retail

May 1 Merchandise perform $125,000 $166,667

May 1-31 purchase (net) 235,000 313,333

May 1-31 Sales (net) 230,000

A. $187,500

B. $172,500

C. $360,000

D. $250,000

Definition

A. $187,500

(125,000 + 235,000) / (166,667 + 313,333) = 75%

((166,667 + 313,333) - 230,000) = 250,000 x 75% = 187,500

Total expense / full Retail = ratio of cost to sleeve Price

(Total retail - full Sales) x proportion of price to Retial Price

Term

The inventory an approach that assigns the most recent prices to price of goods sold is

A. FIFO

B. LIFO

C. Average

D. Certain identification

Definition B. LIFO
Term

The Boxwood company sells blankets because that $60 each. The complying with was taken indigenous the inventory records during May. The company had no start inventory on may 1.

Date Product Z devices Cost

May 3 purchase 5 $20

May 10 revenue 3

May 17 purchase 10 $24

May 20 revenue 6

May 23 revenue 3

May 30 acquisition 10 $30

Assuming the the company uses the perpetual list system, identify the cost of merchandise sold for the

sale of may 20 utilizing the FIFO inventory expense method.

A. $180

B. $136

C. $144 

D. $120

Definition

B. $136

((5-3) x $20) + ((10-6) x $24)= $136

Side Note: FIFO

Date Product Z systems Cost

May 3 acquisition 5 $20

May 10 sale 3

May 17 purchase 10 $24

May 20 sale 6

May 23 sale 3

 

May 30 acquisition 10 $30

Term

The adhering to lots that a specific commodity were obtainable for sale throughout the year:

Beginning inventory 10 units at $30

First acquisition 25 systems at $32

Second purchase 30 devices at $34

Third acquisition 10 units at $35

The firm supplies the routine system and also there room 20 systems of the commodity ~ above hand at the finish of the year. What is the quantity of inventory at the finish of the year according to the average expense method?

A. $690

B. $659

C. $620 

D. $655

Definition

B. $659

<(10 x $30) + (25 x $32) + (30 x $34) + (10 x $35)> / <(10 + 25 + 30 + 10)> = 32.93

32.93 x 20 = $659

*Side Note:

(Total cost of acquisition / total Units) x 20 

Term

Addison, Inc. Provides a perpetual list system. The adhering to is information around one inventory item for the

month that September:

Sep. 1 list 20 devices at $20

4 marketed 10 units

10 to buy 30 devices at $25

17 marketed 20 units

30 purchase 10 devices at $30

If Addison supplies LIFO, the cost of the finishing merchandise perform on September 30 is

A. $750

B. $650

C. $800

D. $700

Definition

A. $750

((20 - 10) x 20) + ((30 - 20) x 25) + ((20 - 10) x 30) = $750 

(10 x 30) + (10 x 25) + (10 x 20) = $750

*Side Note: LIFO - cost of the finishing Merchandise inventory - Subtract and also Multiply Upward

Sep. 1 inventory 20 systems at $20

4 offered 10 units

10 purchase 30 units at $25

17 marketed 20 units 

30 purchase 10 units at $30

Term

Merchandise inventory at the end of the year is overstated. I beg your pardon of the following statements correctly states the effect the the error?

A. Net income is understated

B. Owner\"s same is overstated

C. Gross profit is understated

D. Price of merchandise marketed is overstated

Definition B. Owner\"s same is overstated
Term

Cost circulation is in the order in which expenses were incurred once using

A. First-in, first-out

B. Load average

C. Last-in, first-out 

D. Average cost

Definition A. First-in, first-out
Term

If a company uses the periodic inventory device to cost its inventory, the pistol profit an approach is a technique that can be supplied to check on theft as soon as the yes, really inventory is bring away by the company.

True

 

False

Definition True
Term

The average cost inventory method is rarely provided with a perpetual list system.

True

 

False

Definition True
Term

During periods of increasing costs, the usage of the FIFO an approach of costing perform will an outcome in a greater amount of net earnings than would an outcome from the use of the LIFO price method.

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True

 

False

Definition True
Term

Number the Days’ Sales in Inventory

(Definition)

Definition

Measures the length of time that takes come acquire, sell, and replace inventory, computed by splitting the average inventory by the average daily cost of products sold.