If a company uses lifo and prices are rising large

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If a company uses LIFO and prices are rising large purchases of inventory near from ACCT MISC at Auburn University

25 .   If a company uses LIFO and prices are rising , large purchases of inventory near the end of the year will _ _ _____.
a . reduce cost of goods sold
b. increase income taxes paid
c. reduce the gross profit
d . have no effect on the amount of cost of goods sold
23 .   Table 1 Referring to Table 1 , under the perpetual LIFO method , cost of goods sold on the income statement would be_______.
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24 .   An error occurred in ABC Company ’s accounting system that caused inventory to be reported at $ 65,000 instead of its correct value of $ 61,000 . Overstating inventory also caused ________.
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26 .   If ending inventory for the current period is understated , then owner ’s equity will be_______.
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27 .   Using the lower - of - cost - or - market rule of valuing inventory allows the accountant to attain_______.
a . consistency
b. matching
c. 
d . full disclosure
Answer:  c.   conservatism
28 .   Two separate errors affected Computer Sales in 20 X7 . The beginning inventory was overstated by $ 12,000 and the ending inventory was overstated by $ 18,000 . Net income in 20X7 will be_______.
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29 .   Ending inventory for Commodity X consists of 20 units . Under the FIFO method , the cost of the 20 units is $ 5 each . Current replacement cost is $ 4.50 per unit . Using the lower - of - cost - or - market rule to value inventory , the balance sheet would show ending inventory of __ _ ____.
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30 .   Inventory at the end of the current year is overstated by $ 20,000 . What effect will this error have on the following year 's net income ?
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31 .   Table 2
a . $ 540
b . $ 560
c . $ 1,140
d . $ 1,170
35 .   Lisa ’ s clothing store burned down on May20th , 20X1 . All inventory was destroyed . She did not keep a perpetual inventory system and did not know the value of her inventory to report to the insurance company . Beginning inventory was $ 13,000 . She had purchases of $ 30,000 and sales of $ 29,500 from May 1st through May20th . Her gross profit margin is Chapter Six Quiz 35 % of total sales . Lisa could estimate that her ending inventory on May20th was ________ .
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32 .   Garry Corp uses a perpetual inventory accounting system . Garry Corp has a beginning inventory of 12 units at $ 15 each on January 1 , 20 X1 . The following inventory transactions occurred during the month of January : Garry Corp will report ________ for cost of goods sold in January using the FIFO inventory costing method .
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33 .   For the current year , Hodges Department Store reported the following data_______. Goods available for sale $ 1,074,450 December 31 , inventory balance 85,430 The current replacement cost of inventory on balance sheet data is $ 91,730 . Using the lower - of - cost - or - market rule , what is cost of goods sold for Hodges Department Store ?
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34 .   If the cost of an item of inventory is $ 80 , the current selling price is $ 100 , and the current replacement cost is $ 75 , the amount shown in inventory on the balance sheet under the lower - of - cost - or - market rule is _______.
a . 
b . $ 80
c. $ 100
d . $ 75 or $ 80
Answer:  a .   $ 75
25. If a company uses LIFO and prices are rising, large purchases of inventory near the end of the year will _______.
Chapter Six Quiz
26. If ending inventory for the current period is understated, then owner’s equity will be_______.
27. Using the lower-of-cost-or-market rule of valuing inventory allows the accountant to attain_______.
28. Two separate errors affected Computer Sales in 20X7. The beginning inventory was overstated by $12,000 and the ending inventory was overstated by $18,000. Net income in 20X7 will be_______.a.overstated by $30,000b.overstated by $12,000c.understated by $6,000d.overstated by $6,000
29. Ending inventory for Commodity X consists of 20 units. Under the FIFO method, the cost of the 20 units is $5 each. Current replacement cost is $4.50 per unit. Using the lower-of-cost-or-market rule to value inventory, the balance sheet would show ending inventory of _______.
30. Inventory at the end of the current year is overstated by $20,000. What effect will this error have on the following year's net income?
31. Table 2
Chapter Six QuizReferring to Table 2, under the perpetual LIFO method, ending inventory on the balance sheet would be_______.
32. Garry Corp uses a perpetual inventory accounting system. Garry Corp has a beginning inventory of 12 units at $15 each on January 1, 20X1. The following inventory transactions occurred during the month of January:Garry Corp will report ________ for cost of goods sold in January using the FIFO inventory costing method.a.$539.25b.$317.00c.$510.00d.$346.25

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