9) Which of the following inventory costing methods is based on the actual cost of each particular unit of
inventory?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
10) Which of the following inventory valuation methods should be used for unique items?
A) first-in, first-out
B) last-in, first-out
C) weighted-average
D) specific identification
11) A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for
$9,000 and paid $790 for the freight-in. The company sold the whole lot to a supermarket chain for
$13,000 on account. The company uses the specific-identification method of inventory costing. Which of
the following entries correctly records the cost of goods sold?
A)
Cost of Goods Sold
9,790
Merchandise Inventory
9,790
B)
Merchandise Inventory
9,790
Cost of Goods Sold
9,790
C)
Cost of Goods Sold
9,000
Sales Revenue
9,000
D)
Cost of Goods Sold
9,000
Merchandise Inventory
9,000
12) Classic Autos specializes in selling gently used specialty sports cars and uses the specific
identification method of determining ending inventory and cost of goods sold. Item 507K was sold for
$90,000. Classic purchased the sports car for $50,000 and paid $1,800 for freight in and $1,000 for freight
out. What is the cost of goods sold?
A) $38,200
B) $51,800
C) $51,000
D) $50,000
13) When a company uses the first-in, first-out (FIFO) method, the cost of goods sold represents the cost
of the most recently purchased goods and the value of ending inventory represents the cost of the oldest
goods in stock.
14) The total cost spent on inventory that was available to be sold during a period is called the cost of
goods sold.
15) First Street Merchandisers has total cost of goods sold of $54,500, total beginning inventory of $18,500,
and total ending inventory of $22,100. Cost of goods available for sale is $73,000.
16) Which of the following inventory costing methods uses the cost of the oldest purchases to compute
the cost of goods sold?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
17) Under which of the following inventory costing methods is the ending inventory based on the costs of
the most recent purchases?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
18) A company purchased 500 units for $30 each on January 31. It purchased 550 units for $33 each on
February 28. It sold a total of 650 units for $45 each from March 1 through December 31. What is the cost
of ending inventory on December 31 if the company uses the first-in, first-out (FIFO) inventory costing
method? (Assume that the company uses a perpetual inventory system.)
A) $13,200
B) $10,200
C) $12,000
D) $1,800
19) A company purchased 90 units for $20 each on January 31. It purchased 180 units for $25 each on
February 28. It sold 180 units for $60 each from March 1 through December 31. If the company uses the
first-in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income
statement for the year ending December 31? (Assume that the company uses a perpetual inventory
system.)
A) $1,800
B) $4,500
C) $4,050
D) $6,300
20) Baldwin, Inc. had the following balances and transactions during 2019:
Beginning Merchandise Inventory as of January 1, 2019
125 units at $81
March 10
Sold 50 units
June 10
Purchased 225 units at $86
October 30
Sold 175 units
What would be reported as Cost of Goods Sold on the income statement for the year ending December
31, 2019 if the perpetual inventory system and the first-in, first-out inventory costing method are used?
A) $10,125
B) $14,675
C) $29,475
D) $18,725
21) Nichols, Inc. had the following balances and transactions during 2018:
Beginning Merchandise Inventory as of January 1, 2018
300 units at $80
March 10
Sold 80 units
June 10
Purchased 600 units at $85
October 30
Sold 380 units
What would be reported for Ending Merchandise Inventory on the balance sheet at December 31, 2018 if
the perpetual inventory system and the first-in, first-out inventory costing method are used?
A) $6,400
B) $51,000
C) $37,400
D) $24,000
22) A company that uses the perpetual inventory system sold goods to a customer on account for $4,000.
The cost of the goods sold was $2,000. Which of the following journal entries correctly records this
transaction?
A)
Cost of Goods Sold
4,000
Sales Revenue
4,000
B)
Merchandise Inventory
4,000
Cost of Goods Sold
4,000
C)
Accounts Receivable
4,000
Cash
4,000
Cost of Goods Sold
2,000
Merchandise Inventory
2,000
D)
Accounts Receivable
4,000
Sales Revenue
4,000
Cost of Goods Sold
2,000
Merchandise Inventory
2,000
23) A company that uses the perpetual inventory system sold goods to a customer for cash for $4,200. The
cost of the goods sold was $1,000. Which of the following journal entries correctly records this
transaction?
A)
Cost of Goods Sold
4,200
Sales Revenue
4,200
B)
Cash
4,200
Sales Revenue
4,200
Cost of Goods Sold
1,000
Merchandise Inventory
1,000
C)
Accounts Receivable
4,200
Cash
4,200
Cost of Goods Sold
1,000
Merchandise Inventory
1,000
D)
Merchandise Inventory
4,200
Sales Revenue
4,200
24) A company that uses the perpetual inventory system sold goods for $2,600 to a customer on account.
The company had purchased the inventory for $500. Which of the following journal entries correctly
records the cost of goods sold?
A)
Cost of Goods Sold
500
Sales Revenue
500
B)
Merchandise Inventory
500
Cost of Goods Sold
500
C)
Cost of Goods Sold
500
Merchandise Inventory
500
D)
Accounts Receivable
500
Sales Revenue
500