Chapter 06 – Inventories
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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
56. Cost flow is in the order in which costs were incurred when using
a.
average cost
b.
last-in, first-out
c.
first-in, first-out
d.
weighted average
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
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:
7/22/2017 6:20 PM
DATE MODIFIED:
10/16/2017 5:09 PM
57. Cost flow is in the reverse order in which costs were incurred when using
a.
weighted average
b.
last-in, first-out
c.
first-in, first-out
d.
average cost
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
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:
7/22/2017 6:20 PM
DATE MODIFIED:
10/16/2017 5:09 PM
58. The inventory method that assigns the most recent costs to cost of goods sold is
a.
FIFO
b.
LIFO
c.
weighted average
Chapter 06 – Inventories
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Page 22
d.
specific identification
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
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:
7/22/2017 6:20 PM
DATE MODIFIED:
10/16/2017 5:09 PM
59. The inventory costing method that reports the most current prices in ending inventory is
a.
FIFO
b.
specific identification
c.
LIFO
d.
average cost
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
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:
7/22/2017 6:20 PM
DATE MODIFIED:
10/16/2017 5:09 PM
60. The inventory costing method that reports the earliest costs in ending inventory is
a.
FIFO
b.
LIFO
c.
weighted average
d.
specific identification
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
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
Copyright Cengage Learning. Powered by Cognero.
Page 25
65. Under the _____ inventory method, accounting records maintain a continuously updated inventory value.
a.
retail
b.
periodic
c.
physical
d.
perpetual
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-03 – LO: 06–03
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
66. The inventory data for an item for November are:
Nov. 1
Inventory
20 units at $19
4
Sold
10 units
10
Purchased
30 units at $20
17
Sold
20 units
30
Purchased
10 units at $21
Using a perpetual system, what is the cost of the goods sold for November if the company uses LIFO?
a.
$610
b.
$600
c.
$590
d.
$580
ANSWER:
c
RATIONALE:
The cost of the goods sold for November using LIFO = 10 units at $19 from the
beginning inventory + 20 units at $20 from the November 10 purchase = $190 + $400
= $590
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-03 – LO: 06–03
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
Copyright Cengage Learning. Powered by Cognero.
Page 26
67. The inventory data for an item for November are:
Nov. 1
Inventory
20 units at $19
4
Sold
10 units
10
Purchased
30 units at $20
17
Sold
20 units
30
Purchased
10 units at $21
Using a perpetual system, what is the cost of the goods sold for November if the company uses FIFO?
a.
$610
b.
$600
c.
$590
d.
$580
ANSWER:
d
RATIONALE:
The cost of goods sold for November using FIFO = 20 units at $19 from the beginning
inventory + 10 units at $20 from the November 10 purchase = $380 + $200 = $580
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-03 – LO: 06-03
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
Use the information below to answer the following questions.
The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during
May. The company had no beginning inventory on May 1.
Date
Blankets
Units
Cost
May 3
Purchase
5
$20
10
Sale
3
17
Purchase
10
$24
20
Sale
6
23
Sale
3
30
Purchase
10
$30
68. Assuming that the company uses the perpetual inventory system, determine the cost of goods sold for the sale of May
20 using the LIFO inventory cost method.
a.
$136
b.
$144
c.
$180
d.
$120
ANSWER:
b
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Page 30
74. The ending inventory cost using FIFO is
a.
$1,250
b.
$1,350
c.
$1,375
d.
$1,150
ANSWER:
c
RATIONALE:
Ending inventory using FIFO = 5 units at $65 from the second purchase + 15 units at
$70 from the third purchase = $325 + $1,050 = $1,375
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Periodic units
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-04 – LO: 06–04
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
75. The ending inventory cost using LIFO is
a.
$1,250
b.
$1,350
c.
$1,375
d.
$1,150
ANSWER:
d
RATIONALE:
Ending inventory using LIFO = 10 units at $55 from the beginning inventory + 10
units at $60 from the first purchase = $550 + $600 = $1,150
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Periodic units
LEARNING OBJECTIVES:
FNMN.WAJO.19.06-04 – LO: 06–04
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
76. The ending inventory cost rounded to nearest dollar using average cost is:
a.
$1,353