Accounting for Managers-Test 2

Accounting for Managers-Test 2 - 1. Raw materials...

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1. Raw materials inventories are the goods that a manufacturing company has completed and are ready to be sold to customers. True False Score: 1 of 1 2. In periods of falling prices, LIFO will result in a higher ending inventory valuation than FIFO. True False Score: 1 of 1 3. The inventory turnover ratio is calculated as cost of goods sold divided by ending inventory. True False Score: 1 of 1 4. At December 31, 2010 Howell Company’s inventory records indicated a balance of $1,128,000. Upon further investigation it was determined that this amount included the following: • $168,000 in inventory purchases made by Howell shipped from the seller 12/27/10 terms FOB destination, but not due to be received until January 2nd • $111,000 in goods sold by Howell with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th. • $9,000 of goods received on consignment from Westwood Company What is Howell’s correct ending inventory balance at December 31, 2010? $960,000 $1,119,000 $840,000 $951,000 Score: 0 of 1 5. Peach Pink, Inc. has the following inventory data: July 1 Beginning inventory 20 units at $20 $ 400 July 7 Purchases 70 units at $21 $ 1,470 July 22 Purchases 10 units at $22 $ 220 $ 2,090 A physical count of merchandise inventory on July 30 reveals that there are 35 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods
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sold for July is $1,345 $1,380 $1,390. $1,425. Score: 0 of 1 6. The selection of an appropriate inventory cost flow assumption for an individual company is made by the external auditors. the SEC. the internal auditors. management. Score: 1 of 1 7. Carryable CDs has the following inventory data: Nov. 1 Inventory 15 units at $8.00 each Nov. 8 Purchase 60 units at $8.60 each Nov. 17 Purchase 30 units at $8.40 each Nov. 25 Purchase 45 units at $8.80 each A physical count of merchandise inventory on November 30 reveals that there are 50 units on hand. Cost of goods sold under LIFO is $438 $846 $421 $863 Score: 0 of 1 8. In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory? Average cost method LIFO method FIFO method Need more information to answer Score: 1 of 1 9. Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace wants the most realistic cost of goods sold. Which inventory
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costing method should Ace consider using? Average because all inventory costs will then represent an average amount. Specific identification is the most realistic method because it involves the actual costs. LIFO because cost of goods sold represents the latest costs. FIFO because cost of goods sold represents the earliest costs.
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Accounting for Managers-Test 2 - 1. Raw materials...

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