Reference no: EM131800528

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