Question 1 If the merchandise costs $4,000, insurance in transit costs $200, tar

Question

Question 1

If the merchandise costs $4,000, insurance in transit costs $200, tariff costs $50, processing the purchase order by the purchasing department costs $35, and the company receiving dock personnel costs $15, what is the total cost charged to the merchandise?

$4,000

$4,250

$4,285

$4,300

Question 2

Merchandise inventory at the end of the year was inadvertently overstated. Which of the following statements correctly states the effect of the error on net income, assets, and owner's equity?

net income is overstated, assets are overstated, stockholders' equity is overstated

net income is understated, assets are understated, stockholders' equity is overstated

net income is overstated, assets are overstated, stockholders' equity is understated

net income is understated, assets are understated, stockholders' equity is understated

Question 3

Under a perpetual inventory system:

accounting records continuously disclose the amount of inventory

the purchase returns and allowances account is credited when goods are returned to vendors

increases in inventory resulting from purchases are debited to Purchases

there is no need for a year-end physical count

Question 4

The inventory method that assigns the most recent costs to cost of good sold is:

LIFO

FIFO

average

specific identification

Question 5

Under which method of inventory cost flows is the cost flow assumed to be in the reverse order in which the expenditures were made?

average cost

weighted average

last-in, first-out

first-in, first-out

Question 6

The following lots of a particular commodity were available for sale during the year:

Beginning inventory.......... 10 units at $60
First purchase.................. 25 units at $63
Second purchase.............. 30 units at $64
Third purchase................. 10 units at $70

The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the cost of merchandise sold according to the first-in, first-out method?

$3455

$3395

$3565

$3300

Question 7

The following lots of a particular commodity were available for sale during the year: Beginning inventory is 20 units at $80; First purchase is 30 units at $79; Second purchase is 40 units at $81; and Third purchase is 30 units at $82. What is the total cost of the 25 units in inventory by the average cost method?

$2,045

$2,015

$2,030

$2,000

Question 8

The following lots of a particular commodity were available for sale during the year:

Beginning inventory.......... 10 units at $60
First purchase.................. 25 units at $63
Second purchase.............. 30 units at $64
Third purchase................. 10 units at $70

The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the last-in, first-out method?

$1,240

$1,230

$1,340

$1,220

Question 9

If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

weighted average

LIFO

FIFO

average cost

Question 10

If the cost of an item of inventory is $60, the current replacement cost is $65, and the selling price is $95, the amount included in inventory according to the lower of cost or market concept is:

$120

$60

$65

$95

$4,000

$4,250

Explanation / Answer

1- 4250

2 net income is overstated, assets are overstated, stockholders' equity is overstated

3-accounting records continuously disclose the amount of inventory

4- LIFO

5- last-in, first-out

6- $3455 = 10*60+20*64+25*63

7- 2015 = (20*80+30*79+40*81+30*82)/120 = 80.58*25 = 2014.58 = 2015

8- 1230 = 10*60 + 10*63

9- LIFO

10- 60 LOWER OF COST OR MARKET VALUE

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.