Question 1

Companies are not allowed to report inventory costs by assuming which units of inventory are sold and which units still remain on hand.Companies can assume which inventory units are sold and still remain on hand using a variety of methods (FIFO,LIFO,and weighted-average cost).

Accepted Answer

A) True 
 B)False

Question 2

The cost of unsold inventory at the end of the year is classified as a(n) ______ in the ______.

Accepted Answer

A)  Assets;Balance sheet
B)  Expense;Income statement
C)  Liability;Balance sheetD) A) and B)
E) A) and C)

Question 3

The inventory cost flow assumption that generally best matches the physical flow of inventory is:

Accepted Answer

A)  FIFO.
B)  LIFO.
C)  Weighted-average.D) B) and C)
E) A) and C)

Question 4

During periods when inventory costs are rising,cost of goods sold will most likely be:

Accepted Answer

A)  Higher under FIFO than LIFO.
B)  Higher under FIFO than average cost.
C)  Lower under average cost than LIFO.D) B) and C)
E) A) and B)

Question 5

Using the information below,determine the ending inventory value applying the lower of cost and net realizable value.   Inventory Item  Quantity  Cost  Net Realizable  Value  Cutlets 200$12$14 Chops 400$16$14 Shanks 300$15$12\begin{array} { | l | c | r | r | } \hline 	ext { Inventory Item } & 	ext { Quantity } & 	ext { Cost } & \begin{array} { r } 	ext { Net Realizable } \	ext { Value }\end{array} \\hline 	ext { Cutlets } & 200 & \$ 12 & \$ 14 \\hline 	ext { Chops } & 400 & \$ 16 & \$ 14 \\hline 	ext { Shanks } & 300 & \$ 15 & \$ 12 \\hline\end{array} Inventory Item  Cutlets  Chops  Shanks ​ Quantity 200400300​ Cost $12$16$15​ Net Realizable  Value ​$14$14$12​​

Accepted Answer

A)  $13,300.
B)  $12,000.
C)  $11,600. D) All of the above
E) B) and C)

Exam 6: Inventory and Cost of Goods Sold

Companies are not allowed to report inventory costs by assuming which units of inventory are sold and which units still remain on hand.Companies can assume which inventory units are sold and still remain on hand using a variety of methods (FIFO,LIFO,and weighted-average cost).

Correct Answer
verified

Correct Answer
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The inventory cost flow assumption that generally best matches the physical flow of inventory is:

Correct Answer
verified

The cost of unsold inventory at the end of the year is classified as a(n) in the .

Correct Answer
verified

During periods when inventory costs are rising,cost of goods sold will most likely be:

Correct Answer
verified

Exam 6: Inventory and Cost of Goods Sold

Companies are not allowed to report inventory costs by assuming which units of inventory are sold and which units still remain on hand.Companies can assume which inventory units are sold and still remain on hand using a variety of methods (FIFO,LIFO,and weighted-average cost).

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The inventory cost flow assumption that generally best matches the physical flow of inventory is:

Correct AnswerverifiedShow Answer

The cost of unsold inventory at the end of the year is classified as a(n) ______ in the ______.

Correct AnswerverifiedShow Answer

During periods when inventory costs are rising,cost of goods sold will most likely be:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The cost of unsold inventory at the end of the year is classified as a(n) in the .

Correct Answer
verified

Correct Answer
verified