Question 34 of 50

In a manufacturing company, inventory that is completed and ready for sale is classified as what?

What is the primary purpose of taking a physical inventory in a company that uses a perpetual inventory system?

If goods in transit are shipped FOB shipping point, to whom does the legal title belong during transit?

Which inventory costing method assumes that the latest goods purchased are the first to be sold?

Using the data for Houston Electronics from Illustration 6-5, what is the cost of the ending inventory under the FIFO method?

Using the data for Houston Electronics from Illustration 6-5, what is the cost of goods sold under the LIFO method?

During a period of rising prices, which inventory cost flow method results in the highest net income?

The requirement that a company use the same accounting principles and methods from year to year is known as the:

The lower-of-cost-or-market (LCM) basis is an example of which accounting concept?

If a company understates its ending inventory in the current period, what is the effect on net income in the following accounting period?

What does the inventory turnover ratio measure?

Which method of estimating inventories applies a gross profit rate to net sales to determine the estimated cost of ending inventory?

Under the retail inventory method, the cost-to-retail ratio is applied to what figure to determine the estimated cost of ending inventory?

The moving-average method is an application of the average-cost concept used in which type of inventory system?

Hasbeen Company's physical inventory count was $200,000. Goods held on consignment for Falls Co. costing $15,000 were included. Purchased goods of $10,000 in transit FOB shipping point were not included. What is Hasbeen's correct inventory value?

If a company's ending inventory is overstated by $5,000, what is the effect on the financial statements in the current year?

Under the LIFO conformity rule, if a company uses LIFO for tax purposes, it must also use it for:

A company has beginning inventory of $36,000, cost of goods purchased of $320,000, and ending inventory of $40,000. What is the cost of goods sold?

The inventory records of Shumway Ag Implements show a beginning inventory of 4,000 units at $3 and purchases of 6,000 units at $4. What is the weighted-average unit cost?

Kishwaukee Company has net sales of $200,000 and a gross profit rate of 30 percent. What is the estimated cost of goods sold?

Which of these inventory systems determines the cost of goods sold only at the end of the accounting period?

In applying the lower-of-cost-or-market (LCM) rule, 'market' is defined as:

If beginning inventory is understated by $10,000 and ending inventory is correctly stated, what is the effect on the current year's net income?

Poppins Company has 26,000 units available for sale. A physical count on December 31 reveals 9,000 units on hand. Under the FIFO method, how is the cost of the 9,000 units calculated?

Wal-Mart reported a beginning inventory of $43,803 million, an ending inventory of $44,858 million, and cost of goods sold of $358,069 million. What is its inventory turnover?

In a perpetual inventory system, the entry to record the purchase of merchandise on account involves a debit to which account?

What is the primary reason many U.S. companies select the LIFO method for inventory costing?

What does the term 'consigned goods' refer to?

Under the gross profit method, if cost of goods available for sale is $160,000 and the estimated cost of goods sold is $140,000, what is the estimated cost of ending inventory?

Which of the following is NOT a cost flow assumption used in accounting for inventory?

In a period of falling prices, which inventory method would generally result in the highest ending inventory value on the balance sheet?

What type of inventory system is most suitable for a business selling high unit value items like automobiles or furniture?

The cost of goods available for sale is allocated between which two components?

The calculation for days in inventory is:

Using the data for Houston Electronics from Illustration 6-5, what is the cost of the 450 units in ending inventory under the average-cost method?

The use of just-in-time (JIT) inventory methods is intended to:

What is the key difference between the application of LIFO in a perpetual system versus a periodic system?

Which of the following is NOT a reason for taking a physical inventory?

Caterpillar Inc. reported total inventories of $12,625 million, of which 'Work-in-process' was $2,589 million and 'Finished goods' was $6,785 million. Based on Illustration 6-1, what was the amount of 'Raw materials'?

If an inventory error from 2016 understates ending inventory, and the error is not caught, what is the effect on total net income for the two-year period of 2016 and 2017?

A major disadvantage of the specific identification method is that:

The retail inventory method requires that the company's records show which of the following for its goods available for sale?

In a perpetual system using LIFO, if a purchase is made after the last sale of the period, how are the costs of that purchase allocated?

A company has the following inventory items: Item A with cost $100 and market $90; Item B with cost $200 and market $210. What is the total value of inventory using the lower-of-cost-or-market rule applied to individual items?

Which of the following is NOT a reason a perpetual inventory system's records might be incorrect, necessitating a physical count?

What is the primary objective of inventory management, as suggested by the example of Caterpillar Inc.?

If a company has an inventory turnover of 10 times, what is its approximate days in inventory?

According to Illustration 6A-3, what is the cost of the ending inventory for Houston Electronics under the LIFO perpetual method?

Which of the following would NOT be included in the cost of inventory?