CHAPTER 9
INVENTORIES:
ADDITIONAL VALUATION
ISSUES
MULTIPLE CHOICE
—Conceptual
Answer
No.
Description
d
1.
Knowledge of lower of cost or market valuations.
d
2.
Appropriate use of LCM valuation.
c
3.
Definition of "market" under LCM.
b
4.
Definition of "ceiling."
a
5.
Definition of "designated market value."
c
6.
Application of lower of cost or market valuation.
d
7.
Effect of inventory writedown.
b
8.
Net realizable value under LCM.
d
9.
Definition of "net realizable value."
a
10.
Valuation of inventory at net realizable value.
d
11.
Appropriate use of net realizable value.
a
12.
Material purchase commitments.
a
13.
Loss recognition on purchase commitments.
d
14.
Appropriate use of the gross profit method.
b
15.
Appropriate use of the gross profit method.
d
16.
Advantage of retail inventory method.
c
17.
Conventional retail inventory method.
a
18.
Assumptions of the retail inventory method.
d
19.
Appropriate use of the retail inventory method.
b
20.
Markdowns and the conventional retail method.
a
21.
Markups and the conventional retail method.
b
*22.
Knowledge of the cost ratio for retail inventory methods.
c
23.
Inventory turnover ratio.
c
*24.
Dollarvalue LIFO retail method.
MULTIPLE CHOICE
—Computational
Answer
No.
Description
a
25.
Value inventory at LCM.
c
26.
Relative sales method of inventory valuation.
c
27.
Entry for purchase commitment loss.
d
28.
Calculate cost of goods sold given a markup on cost.
d
29.
Calculate merchandise purchases given a markup on cost.
a
30.
Calculate total sales from cost information.
a
31.
Markup on cost equivalent to a markup on selling price.
b
32.
Estimate ending inventory using gross profit method.
c
33.
Calculate ending inventory using gross profit method
*This topic is dealt with in an Appendix to the chapter.
MULTIPLE CHOICE
—Computational
(cont.)
Answer
No.
Description
.
b
34.
Calculate ending inventory using gross profit method.
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a
35.
Estimate cost of inventory destroyed by fire.
a
36.
Determine items to be included in inventory.
b
37.
Calculate cost of retail ratio to approximate LCM.
b
38.
Calculate ending inventory at retail.
a
39.
Calculate cost to retail ratio approximating LCM.
b
40.
Calculate cost of inventory lost using retail method.
b
*41.
Calculate ending inventory at cost using LIFO retail.
c
*42.
Determine cost to retail ratio using LIFO retail.
b
43.
Calculate inventory turnover ratio.
d
44.
Determine cost to retail ratio to approximate LCM.
c
*45.
Determine cost to retail ratio using LIFO cost.
d
46.
Calculate ending inventory at retail.
a
47.
Calculate ending inventory using conventional retail.
a
*48.
Calculate ending inventory cost using dollarvalue LIFO.
b
*49.
Calculate cost of ending inventory using LIFO retail.
a
*50.
Calculate ending inventory cost using dollarvalue LIFO.
MULTIPLE CHOICE
—CPA Adapted
Answer
No.
Description
d
51.
Recognizing a loss due to LCM.
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 Spring '08
 Warren
 Accounting, ........., retail inventory

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