SSNT8_Invent2 - Inventories Measurement Chapter 8 -...

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Inventories Measurement
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Chapter 8 - Inventories • Perpetual / Periodic • Gross / Net Method • FIFO / LIFO / Average Cost / Specific Item • Inventory Pools / Dollar Value LIFO • Ratios
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Knowledge Check In a perpetual inventory system, if merchandise is returned to a supplier: A) Purchase returns is credited. B) Inventory is credited. C) Purchase discounts is credited. D) Inventory is debited.
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Knowledge Check The English Company uses the periodic inventory system. Information for 2009 is as follows: Sales $2,650,000 Beginning inventory 680,000 Purchases 1,200,000 Purchase returns 12,000 Ending inventory 740,000 English’s cost of goods sold for 2009 is: A) $1,522,000 B) $1,188,000 C) $1,140,000 D) $1,128,000
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Knowledge Check Ductant Corporation uses the periodic inventory system. At December 31, 2009, the end of the company's fiscal year, a physical count of inventory revealed an ending inventory balance of $320,000. The following items were not included in the physical count: Goods held on consignment at Han Corporation $23,000 Merchandise shipped to a customer on 12/30 f.o.b. 12,000 destination (merchandise arrived at customer's location on 1/3/10) Merchandise shipped to a customer on 12/29 f.o.b. shipping 6,000 point (merchandise arrived at customer's location on 1/2/10) Merchandise purchased from a supplier, shipped f.o.b. 24,000 destination on 12/29, in transit at year-end Ductant’s 2009 ending inventory should be: A) $320,000 B) $379,000 C) $355,000 D) $332,000
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Knowledge Check By the gross method of accounting for purchase discounts, a discount not taken is recorded as: A) Purchases. B) Interest expense. C) A reduction in sales revenue. D) None of the above.
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Knowledge Check By the net method of accounting for purchase discounts, a discount not taken is recorded as: A) Purchases. B) Interest expense. C) A reduction in sales revenue. D) None of the above.
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Knowledge Check Identify the statement below concerning the LIFO inventory method that is untrue . A) In the absence of changes in costs, the results of using LIFO would be identical to those obtained by FIFO. B) LIFO will provide a close matching of current revenues with current costs since the most recent costs are expensed first. C) The ending inventory under LIFO will tend to approximate replacement cost. D) In periods of declining costs, cost of goods sold using LIFO will produce a lower cost of goods sold than FIFO.
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Garrison, Inc., had 800 units of inventory on hand at March 1, 2009, costing $20 each. Purchases and sales of inventory during the month of March were as follows: Date Purchases Sales March 8 600 units 15 400 units @ $22 each 22 400 units @ $24 each 27 400 units Garrison uses the periodic inventory system. According to a physical count, 600 units were on hand at the end of March. The cost of inventory at the end of March applying the
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SSNT8_Invent2 - Inventories Measurement Chapter 8 -...

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