Chapter 06 – Inventories
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Page 91
(d)
yes
(e)
no
(f)
yes
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-07 – LO: 06–07
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:20 PM
DATE MODIFIED:
10/16/2017 5:09 PM
199. 1. Explain the effect of the following on the financial statements:
Goods held on consignment were included in the ending inventory count.
Goods purchased FOB shipping point were in transit on the last day of the year.
The goods were not counted as part of ending inventory.
Goods sold FOB shipping point were in transit on the last day of the year.
These goods were not counted as part of ending inventory.
inventory. By including these goods, ending inventory, gross profit and net income
are overstated and cost of goods sold is understated. On the balance sheet, inventory,
current assets, total assets, and stockholders’ equity are all overstated.
Goods purchased FOB shipping point were in transit on the last day of the year.
POINTS:
1
Chapter 06 – Inventories
ANSWER:
c
POINTS:
1
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Merchandise purchased during October
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-02 – LO: 06–02
BUSPROG: Analytic
DATE CREATED:
10/4/2017 4:17 PM
DATE MODIFIED:
10/16/2017 5:09 PM
ANSWER:
c
RATIONALE:
Ending inventory (LIFO): $1,670 ($830 + $840)
POINTS:
1
DIFFICULTY:
Bloom’s Appyling
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-02 – LO: 06–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
10/4/2017 4:01 PM
DATE MODIFIED:
10/16/2017 5:09 PM
Chapter 06 – Inventories
c.
$13
d.
$11
ANSWER:
d
RATIONALE:
Total cost of the three units ($33) / Number of units (3) = $11
POINTS:
1
DIFFICULTY:
Bloom’s Appyling
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Merchandise purchased during October
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-02 – LO: 06–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
10/4/2017 4:21 PM
DATE MODIFIED:
10/16/2017 5:09 PM
212. One unit is sold on October 31 for $28. Using the table provided, determine gross profit under the FIFO method.
a.
$28
b.
$13
c.
$15
d.
$13
ANSWER:
b
RATIONALE:
Sales – Cost of goods sold = Gross profit $28 – $5 = $23
POINTS:
1
DIFFICULTY:
Bloom’s Appyling
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Merchandise purchased during October
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-02 – LO: 06–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
10/4/2017 4:28 PM
DATE MODIFIED:
10/16/2017 5:09 PM
