97%(186)181 out of 186 people found this document helpful
This preview shows page 27 - 31 out of 55 pages.
Question 6Question text(T / F) Perpetual inventory procedure requires an entry to Merchandise Inventory whenever goods are purchased, returned, sold, or otherwise adjusted, so that inventory records reflect actual units on hand at all times. Thus, an entry is required to record cost of goods sold for each sale.Select one:True False FeedbackThe correct answer is 'True'.Question 7Question text(T / F) Inventory turnover ratio = (Cost of goods sold) / (Average inventory )
Question 8Question text(T / F) Inventory turnover measures the efficiency of the firm in managing and selling inventory. It gauges the liquidity of the firm's inventory.Question 9Question text(T / F) Overstated ending inventory results in an overstatement of cost of goods sold and an understatement of gross margin and net income.Question 10Question text(T / F) In a period of rising prices, FIFO results in the lowest cost of goods sold.Select one:True False Feedback
Correct. The cost of goods sold consists of the earliest purchases at the lowest costs in a period of rising prices.The correct answer is 'True'ABC Inc. sells socks. During February 2016, its inventory records for one brand of its socks were as follows:QuantityPrice perpairBeginning Inventory10pairs$20.00=$200February 6 Purchase4pairs$25.00=$100February 10 Purchase5pairs$27.40=$137February 15 Sale7pairsN/ASee information above. Using this information, determine ending inventory under the weighted-average method.Question 2Question textYou have purchased 100 units of product X, which has a list price of $13.60 per unit. Because you are a wholesaler, you are granted a trade discount of 19.3%. The cash discount terms are 2/6, n/45. How much will you pay in total for product X assuming that you pay for the product within 4 days of purchase?
Question 3Question textWhich of the following entities is charged with the development and promulgation of financial accounting standards in the United States?