1. Inventories affect
both the balance sheet and the income statement.
neither the balance sheet nor the income statement.
only the balance sheet.
only the income statement.
2. Manufacturers usually classify inventory into all the following general categories except:
merchandise inventory.
raw materials.
work in process.
finished goods.
3. A company just starting business made the following four inventory purchases in June:
|
June 1
|
150 units
|
|
$ 390
|
|
June 10
|
200 units
|
|
585
|
|
June 15
|
200 units
|
|
630
|
|
June 28
|
150 units
|
|
510
|
|
|
|
$2,115
|
A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is
$1,564.
$668.
$536.
$1,447.
4. Indrisano's Used Cars uses the specific identification method of costing inventory. During March, Indrisano purchased three cars for $6,000, $7,200, and $9,600, respectively. During March, two cars are sold for a total of $17,300. Indrisano determines that at March 31, the $7,200 car is still on hand. What is Indrisano's gross profit for March?
$500
$2,100
$1,700
$4,100
5. Priscilla has the following inventory information.
|
July 1
|
|
Beginning Inventory
|
|
20 units at $19
|
|
$ 380
|
|
7
|
|
Purchases
|
|
70 units at $20
|
|
1,400
|
|
22
|
|
Purchases
|
|
10 units at $23
|
|
230
|
|
|
|
|
|
|
$2,010
|
6. A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is
$1,390.
$1,430.
$1,380.
$1,407.
7. Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods.
False
True
8. The first-in, first-out (FIFO) inventory method results in an ending inventory valued at the most recent cost.
False
True
9. A company may use more than one inventory costing method concurrently.
False
True
10. Inventory turnover is calculated as cost of goods sold divided by ending inventory.
True
False
11. The cost of goods available for sale consists of the beginning inventory plus the cost of goods purchased.
False
True