Inventories Effect correct answers both the balance sheet and the income statement
Legal Title correct answers The factor which determines wether or not goods should be included in a physical count of inventory is
If goods in transit are shipped FOB destination correct answers the seller has ...
ACC 101 Exam 3 || with Complete Solutions.
Inventories Effect correct answers both the balance sheet and the income statement
Legal Title correct answers The factor which determines wether or not goods should be included
in a physical count of inventory is
If goods in transit are shipped FOB destination correct answers the seller has legal title to the
goods until they are delivered
Which of the following should be included in the physical inventory of a company correct
answers Goods held on consignment from another company
Freight terms of FOB shipping point mean that the correct answers buyer must bear the freight
cost
For companies that use a perpetual inventory system, all of the following are purposes for taking
a physical inventory except correct answers to determine ownership of the goods
The term "FOB" denotes correct answers free on board
Under a consignment arrangement, the correct answers cosignor has ownership until goods are
sold to the customer
Inventoriable costs include all of the following except the correct answers costs of the purchasing
and warehousing departments
Beginning inventory plus the cost of goods purchased equals correct answers cost of goods
available for sale
Cost of goods sold is computed from the following equation correct answers beginning inventory
+ cost of goods purchased - ending inventory
The LIFO inventory method assumes that the cost of the latest units purchased are correct
answers the first to be allocated to costs of goods sold
The cost of goods available for sale is allocated between correct answers ending inventory and
costs of goods sold
if a company changes its inventory valuation method, the effect of the change on net income
should be disclosed in the financial statements correct answers TRUE
An error that overstates the ending inventory will also cause net income for the period to be
overstated correct answers FALSE
, If inventoried are valued using the LIFO cost assumption, they should not be classified as a
current asset on the balance sheet correct answers FALSE
Under the lower-of-cost-market basis, market is defined as current replacement cost correct
answers TRUE
Accountants believe that the write down from cost to market should not be made in the period
which the price decline occurs correct answers FALSE
Inventory turnover is calculated as cost of goods sold divided by ending inventory correct
answers FALSE
Finished goods are a classification of inventory for a manufacturer that are completed and ready
for sale correct answers TRUE
Under the FIFO method, the costs of the earliest units purchased are the first charged to cost of
goods sold correct answers TRUE
The cost of goods available for sale consists of the beginning inventory plus the cost of goods
purchased correct answers TRUE
The lower-of-cost-or-market basis is an example of the accounting concept of conservatism
correct answers TRUE
Inventories are reported in the current asset section of the balance sheet immediately below
receivables correct answers TRUE
The accounting principle that requires that the cost flow assumption be consistent with the
physical movement of goods is correct answers nonexistent; that is, there is no accounting
requirement
Which of the following statements is correct with respect to inventories? correct answers Under
FIFO, the ending inventory is based on the latest units purchased
In a period of increasing prices, which inventory flow assumption will result in the lowest
amount of income tax expense? correct answers LIFO
The specific identification method of costing inventories is used when the correct answers
company sells a limited quantity of high-unit cost items
Inventory is reported in the financial statements at correct answers the lower-of-cost-or-market
The lower-of-cost-or-market basis of valuing inventories is an example of correct answers
Conservatism
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller FullyFocus. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £8.91. You're not tied to anything after your purchase.
