Recent Question

In a period of falling prices, the average-cost method True or false 1. In a period of falling prices, the average-cost method results in a lower cost of goods sold than the FIFO method. 2. The lower-of-cost-or-net realizable value basis is an example of the accounting concept of prudence. 3. Inventories are reported in the current assets section of the statement of financial position immediately before receivables 4. In a perp ...

Other / Other 02 Apr 2016

The first-in, first-out (FIFO) inventory method results in an ending inventory True or false 1. Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company. 2. The first-in, first-out (FIFO) inventory method results in an ending inventory valued at the most recent cost. 3. The expense recognition principle requires that the ...

Other / Other 02 Apr 2016

Neighborly Industries has the following inventory 1. Holliday Company's inventory records show the following data: Units Unit Cost Inventory, January 1 5,000 ₤4.50 Purchases: June 18 4,500 4.00 November 8 3,000 3.50 A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for ₤6 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. If the comp ...

Other / Other 02 Apr 2016

The average days to sell inventory for Bosio 1. At December 31, 2011, Daewoo Inc. reported total assets of W201,295,000, and net income of W50,335,000 for the current year. Daewoo determined that inventory was overstated by W1,600,000 at the beginning of 2012 (this was not corrected). What is Daewoo’s corrected amount for total assets for 2011? a. W150,969,000. b. W199,695,000. c. W202,895,000. d. W251,630,000 2. Reinhoff In ...

Other / Other 02 Apr 2016

The accounting principle that requires that the cost flow 1. A problem with the specific identification method is that a. inventories can be reported at actual costs. b. management can manipulate income. c. matching is not achieved. d. the lower-of-cost-or-net realizable value basis cannot be applied. 2. The selection of an appropriate inventory cost flow assumption for an individual company is made by a. the external auditors. ...

Other / Other 02 Apr 2016

The lower-of-cost-or-net realizable value basis of valuing inventories 1. Net realizable value refers to a. the net amount the company expects to realize from the sale. b. the selling price. c. the cost to replace the item. d. the gross profit realized from the sale. 2. Which costing method cannot be used to determine the cost of inventory items before lower-of-cost-or-net realizable value market is applied? a. Specific identificat ...

Other / Other 02 Apr 2016

Godchaux Inc. took a physical inventory 1. The term "FOB" denotes a. free on board. b. freight on board. c. free only (to) buyer. d. freight charge on buyer. 2. As a result of a thorough physical inventory, Hastings Company determined that it had inventory worth $540,000 at December 31, 2011. This count did not take into consideration the following facts: Carlin Consignment store currently has goods worth $104,000 on its sales f ...

Other / Other 02 Apr 2016

An error that overstates the ending inventory will also cause net income True or false 1. In a period of rising prices, the statement of financial position will report a higher inventory amount if FIFO, rather than average-costing, is the cost flow assumption used. 2. The accounting concept of prudence dictates that the accounting principle used should be the one least likely to overstate assets and income. 3. Accountants believe t ...

Other / Other 02 Apr 2016

Breguet Company uses the FIFO inventory 1. In a period of falling prices, which inventory method would result in the lowest tax burden? a. Average-cost. b. FIFO. c. No difference. d. Cannot be determined. 2. Henri Company uses the average-cost inventory method. Its 2010 ending inventory was €40,000, but it would have been €60,000 if FIFO had been used. Thus, if FIFO had been used, Henri’s income before income taxes ...

Other / Other 02 Apr 2016

All inventories are reported as current assets on the statement True or false 1. All inventories are reported as current assets on the statement of financial position. 2. One reason a company using a perpetual inventory system must make a physical count of goods is to determine the amount of inventory on hand as of the statement of financial position date. 3. IFRS allows companies to cost inventory using either the LIFO or the FIF ...

Other / Other 02 Apr 2016