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Exam 6: Inventory and Cost of Goods Sold

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Question 81

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Inventory does not include:

A) Materials used in the production of goods to be sold.
B) Assets intended to be sold in the normal course of business.
C) Equipment used in the manufacturing of assets for sale.
D) Assets currently in production for normal sales.

E) A) and D)
F) None of the above

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Question 82

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The largest expense on a retailer's income statement is typically:

A) Salaries.
B) Cost of goods sold.
C) Income tax expense.
D) Depreciation expense.

E) None of the above
F) B) and C)

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Question 83

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A multiple-step income statement reports multiple levels of profitability,such as gross profit,operating income,income before income taxes,and net income.

The primary difference between the periodic and perpetual inventory systems is:

Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month.Cost of goods sold assuming weighted-average cost would be (round weighted-average unit cost to four decimals if necessary) :

In a periodic inventory system,at the time of a sale the cost of inventory sold is:

Under the principle of lower-of-cost-or-market,when a company has 10 units of inventory A with market value of $50 and a cost of $60,what is the adjustment?

What does it mean that FIFO has a balance sheet focus and LIFO has an income statement focus?

During periods of rising costs,FIFO generally results in a higher cost of goods sold.

LeGrand Corporation reported the following amounts in its income statement: What was LeGrand's gross profit?

Inventory records for Marvin Company revealed the following: Marvin sold 2,300 units of inventory during the month.Ending inventory assuming LIFO would be:

The adjustment to write down inventory from cost to its lower market value includes a debit to Cost of Goods Sold and a credit to Inventory.

A periodic inventory system does not continually modify inventory amounts,but instead adjusts for purchases and sales of inventory at the end of the reporting period based on a physical count of inventory on hand.

Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month.Cost of goods sold assuming FIFO would be:

Inventory records for Marvin Company revealed the following: Marvin sold 2,300 units of inventory during the month.Ending inventory assuming weighted-average cost would be (round weighted-average unit cost to four decimals if necessary) :

Listed below are five terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term placing the letter designating the term in the space provided. -_____ Inventory items for which the manufacturing process is complete.

The following information pertains to Julia & Company: March 1 Beginning inventory = 30 units @ $5 March 3 Purchased 15 units @ $4 March 9 Sold 25 units @ $8 What is the ending inventory balance for Julia & Company assuming that it uses FIFO?

During 2015,a company sells 20 units of inventory.The company has the following inventory purchase transactions for 2015: Calculate ending inventory and cost of goods sold for 2015 assuming the company uses LIFO with a periodic inventory system.

What does the balance of cost of goods sold in the income statement represent? What does the balance of inventory in the balance sheet represent?

Consider the following inventory data for two companies: Which of these companies had the higher inventory turnover ratio?