147.
After evaluating the lower of cost and net realizable value of inventory, the accountant
prepares a year-end adjustment. That adjustment would:
148.
The inventory turnover ratio is measured as:
149.
The inventory turnover ratio measures:
150.
Martha Inc.’s sales equal $60,000 and cost of goods sold equals $20,000. Its beginning
inventory was $1,600 and its ending inventory is $2,400. Martha’s inventory turnover ratio
equals:
151.
Lebaron Co.’s beginning inventory is $2,000 and its ending inventory is $1,000. The
inventory turnover is 6 times. Cost of goods sold for the year must equal:
152.
Truman Co. sells a large number of common household items, while Stapleton sells a
small number of expensive items. The two companies report the same dollar amount for
ending inventory and gross profit for the year. Which of the following is most likely true?
153.
Consider the following inventory data for two companies:
Nichols Inc.,
Winters Inc.,
Beginning
inventory
$120,000
$150,000
Ending inventory
80,000
100,000
Purchases
240,000
310,000
Which of these companies had the higher inventory turnover ratio?
154.
The following balances come from the financial statements of Way Industries:
Sales revenue
$850,000
Accounts receivable
$280,000
Beginning inventory
$50,000
Ending inventory
$30,000
Net purchases
$460,000
Sales returns
$50,000
Sales discount
$20,000
Given this information, what is the company’s inventory turnover ratio?
155.
Company A is identical to Company B in every regard except that Company A uses FIFO
and Company B uses LIFO. In an extended period of rising inventory costs, which of the
following is true of Company A compared to Company B?
156.
Anthony Corporation reported the following amounts for the year:
Net sales
$296,000
Cost of goods sold
138,000
Average inventory
50,000
Anthony’s inventory turnover ratio is:
157.
Anthony Corporation reported the following amounts for the year:
Net sales
$296,000
Cost of goods sold
138,000
Average inventory
50,000
Anthony’s average days in inventory is (round to the nearest whole day):
158.
Consider the following inventory data:
Beginning inventory
$150,000
Ending inventory
100,000
Purchases
310,000
What is the average days in inventory for the year?
159.
The gross profit ratio measures:
160.
Which of the following would increase the gross profit ratio?
161.
The gross profit ratio will typically be higher for companies that:
162.
Nu Company reported the following data for its first year of operations:
Net sales
$2,800
Cost of goods sold
1,680
Operating expenses
880
Ending inventories
820
What is Nu’s gross profit ratio?
163.
Anthony Corporation reported the following amounts for the year:
Net sales
$296,000
Cost of goods sold
138,000
Average inventory
50,000
Anthony’s gross profit ratio is:
164.
In a periodic inventory system, the purchase of inventory is debited to:
165.
Northwest Fur Co. started the year with $94,000 of merchandise inventory on hand. During
the year, $400,000 in merchandise was purchased on account with credit terms of 1/15,
n/45. All discounts were taken. Northwest paid freight-in charges of $7,500. Merchandise
with an invoice amount of $5,000 was returned for credit. Cost of goods sold for the year
was $380,000. What is ending inventory?
166.
On May 1, Ace Bonding Company purchased inventory costing $2,000 on account with
terms 2/10, n/30. On May 18, Ace pays for this inventory and records which of the
following using a periodic inventory system?
A.
Accounts Payable
2,000
Cash
2,000
B.
Accounts Payable
1,960
Purchase Discounts
40
Cash
2,000
C.
Accounts Payable
2,000
Purchase Discounts
40
Cash
1,960
D.
Cash
2,000
Accounts Payable
2,000
167.
On May 1, Ace Bonding Company purchased inventory costing $2,000 on account with
terms 2/10, n/30. On May 8, Ace pays for this inventory and records which of the following
using a periodic inventory system?
A.
Accounts Payable
2,000
Cash
2,000
B.
Accounts Payable
1,960
Purchase Discounts
40
Cash
2,000
C.
Accounts Payable
2,000
Purchase Discounts
40
Cash
1,960
D.
Cash
2,000
Accounts Payable
2,000
168.
Ace Bonding Company purchased inventory on account. The inventory costs $2,000 and is
expected to sell for $3,000. How should Ace record the purchase using a periodic inventory
system?
A.
Purchases
2,000
Accounts Payable
2,000
B.
Cost of Goods Sold
2,000
Deferred Revenue
1,000
Sales Revenue
3,000
C.
Cost of Goods Sold
2,000
Accounts Payable
2,000
D.
Cost of Goods Sold
2,000
Gain
1,000
Accounts Payable
3,000
169.
Davis Hardware Company uses a periodic inventory system. How should Davis record the
sale of inventory costing $620 for $960 on account?
A.
Cost of Goods Sold
620
Purchases
620
Accounts Receivable
960
Sales Revenue
960
B.
Accounts Receivable
960
Sales Revenue
960
C.
Purchases
620
Gain
340
Sales Revenue
960
D.
Accounts Receivable
960
Sales Revenues
620
Gain
340
170.
Davis Hardware Company uses a periodic inventory system. How should Davis record the
return of inventory previously purchased on account for $200?
A.
Inventory
200
Accounts Payable
200
B.
Accounts Payable
200
Inventory
200
C.
Purchase Returns
200
Accounts Payable
200
D.
Accounts Payable
200
Purchase Returns
200
171.
In a periodic inventory system, the entry at the time of a sale to record the cost of
inventory sold includes a:
172.
Good Inc., sold inventory for $1,200 that was purchased for $700. Good records which of
the following when it sells inventory using a periodic inventory system?
173.
Suppose that Hastings Corporation overstates its ending inventory for 2018. What effect
will this have on the reported amount of cost of goods sold for 2018?
6-99
174.
Bill Inc.’s correct ending balance for the inventory account at the end of 2018 should be
$5,000, but the company incorrectly stated it as $3,000. In 2019, Bill correctly recorded its
ending balance of the inventory account. Which one of the following is true?
175.
If a company overstates its ending balance of inventory in year 1 and it records inventory
correctly in year 2, which one of the following is true?
6-100
176.
If a company understates its ending balance of inventory in year 1 and it records inventory
correctly in year 2, which one of the following is true?
177.
If a company understates its count of ending inventory in Year 1, which of the following is
true?
Matching Questions