Inventories and Cost of sales
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each of the black spaces below before clicking
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| Goods in transit shipped to Abbey (purchaser) FOB Destination : included or exclude from inventory | show 🗑
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| Goods in transit shipped to Abbey (purchaser) FOB Shipping Point: included or exclude from inventory | show 🗑
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| Goods in transit shipped by Abbey (seller) FOB Destination: included or exclude from inventory | show 🗑
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| Goods in transit shipped by Abbey (seller) FOB Shipping Point: included or exclude from inventory | show 🗑
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| show | LIFO because when purchase costs are consistenly rising, LIFO lowers the income taxes paid by deferring some of them to future periods.
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| A reports end. inv. in year 1 of $25,000 instead of the correct amount of $20,000. this error is (U: understated, O: overstated) End. Inv. is U and COGS is O End. Inv. is O and COGS is U End. Inv. is U and COGS is U End. Inv. is O and COGS is O | show 🗑
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| A company reports merchandise inventory on December 31 at $250,000 but LCM applied to items is $200,000. Record the journal entry to report merchandise inventory at the correct amount: | show 🗑
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| show | be the same for all four methods.
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| show | year 2 end. inv. and year 2 beg. inv.
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| The _____ principle states that inventory costs are expensed as cost of goods sold when inventory is sold. | show 🗑
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| Which statement(s) below is(are) correct regarding the purpose of taking a physical inventory count? | show 🗑
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| show | purchaser
and
seller
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| The FIFO cost flow assumption assumes that the cost of items purchased ... (earliest/latest) are the costs that will be transferred first to cost of goods sold on the ... (balance sheet/income statement). | show 🗑
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| Why would the physical count of inventory be different than what is shown in perpetual inventory records? | show 🗑
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| show | Cost of goods available for sale must be allocated between cost of goods sold and ending inventory.
and
Cost of goods sold plus ending inventory will equal the total goods available for sale.
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| show | Inv. items sold are considered part of cost of goods sold on the income statement.
Inv. items retained at the end of the period are considered part of Merchandise Inventory on the balance sheet.
Inv. costs are treated as an expense when they are sold.
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| show | A car dealership
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| show | Implement security measures, such as cameras.
Restrict access to inventory.
Match inventory received with purchase orders.
Control access to inventory records.
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| show | preventing risk
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| Assuming purchase costs are rising in a periodic inventory system, determine which of the statements below are correct regarding the cost of goods sold under FIFO, LIFO and weighted average cost flow methods. (1) | show 🗑
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| Assuming purchase costs are rising in a periodic inventory system, determine which of the statements below are correct regarding the cost of goods sold under FIFO, LIFO and weighted average cost flow methods. (2) | show 🗑
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| show | Companies using LIFO will report the highest ending inventory on their balance sheets, as compared to companies using FIFO or weighted average.
Weighted average cost of goods sold will be between FIFO and LIFO costs of goods sold.
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| Assuming purchase costs are declining and a periodic inventory system is used, determine the statements below which correctly describe what is happening to cost of goods sold under FIFO, LIFO and weighted average cost flow methods.(2) | show 🗑
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| An advantage of the weighted average method under a periodic inventory system is that it: | show 🗑
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| There are advantages to using each of the four inventory costing methods. Identify the statements below that are correct regarding these advantages. | show 🗑
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| Which of the statements below explain why LCM is used? (1) | show 🗑
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| Which of the statements below explain why LCM is used? (2) | show 🗑
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| show | This year's total assets will be understated.
This year's total equity will be understated.
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| company overstated its ending inventory in the current year by $5,000. The company incorrectly reported $100,000 of net income. Explain the consequences of this error on the current period's income statement. | show 🗑
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| show | Cost of goods sold will be too high by $5,000, and this caused net income to be understated by $5,000.
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| show | is useful in evaluating liquidity of inventory.
reveals how much inventory is available in terms of the number of days' sales.
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| Review the statements below and select the ones that are correct regarding the days' sales in inventory ratio (2) | show 🗑
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| Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except: | show 🗑
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| show | Cost of goods sold to be understated and net income to be overstated.
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| Hull Company reported the following income statement information for the current year: Sales: $420,000 Beg. inv.:$147,000 Cost of goods purchased: 283,000 Cost of goods available for sale: 430,000 Ending inventory: 154,000 Cost of goods sold: | show 🗑
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