12) Merchandise inventory:

Must be sold within one month

Includes supplies the company will use in future periods

Is classified with investments on the balance sheet

Is a current asset.

Is a long-term asset

13) The current period's ending inventory is:

The current period's beginnng inventory.

The current period's cost of goods sold.

The next period's beginning inventory.

The current period's net purchases.

The prior period's beginning inventory.

14)

15)

16)

17) In applying the lower of cost or market method to LIFO inventory valuation, market is defined as:

Current sales price.

LIFO

Current replacement cost.

FIFO

Historical cost.

18) Generally accepted accounting principles require that the inventory of a company be reported at:

Retail value.

Replacement cost.

Market value.

Historical cost.

Lower of cost or market.

19)

20) Damaged and obsolete goods that can be sold:

Are included in inventory at their net realizable value.

Should be disposed of immediately.

Are included in inventory at their full cost.

Are never counted as inventory.

Are assigned a value of zero.

21) Goods in transit are included in a purchaser's inventory:

After the half-way point between the buyer and seller.

When the goods are shipped FOB shipping point.

When the supplier is responsible for freight charges.

At any time during transit.

If the goods are shipped FOB destination.

22) Companies can and often do use different costing methods for financial reporting and tax reporting. An

exception to this is the:

FIFO inventory valuation method.

Matching principle.

Consistency concept.

LIFO Conformity rule.

Full disclosure principle.

23) The understatement of the endinginventory balance causes:

Cost of goods sold to be overstated and net income to be understated.

Cost of goods sold to be overstated and net income to be correct.

Cost of goods sold to be understated and net income to be overstated.

Cost of goods sold to be overstated and net income to be overstated.

Cost of goods sold to be understated and net income to be understated.

24)

A company had the following purchases and sales during its first year of operations: January: February: May: September: November: Purchases 10 units at $120 20 units at $125 15 units at $130 12 units at $135 10 units at $140 Sales 6 units 5 units 9 units 8 units 13 units On December 31, there were 26 units remaining in ending inventory. Using the perpetual FIFO inventory costing method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.) $5,130. O $5,400. $3,540. O $8,670 O $3,270. A company's inventory records report the following in November of the current year: Beginning Purchase Purchase November 1 November 2 November 12 5 units @ $20 10 units @ $22 6 units @ $25 On November 8, it sold 12 units for $54 each. Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold? $260 O $210 O $282 $254 O $188 Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. 15 units at $20 each June 1 Beginning inventory June 15 Sale of 6 units for $50 each June 29 Purchase 8 units at $25 each The cost of the ending inventory is: $200 $300 $220 $380 O $275 A company has the following per unit original costs and market values for its inventory. Lower of cost or market is applied to individual items. Part A: 50 units with a cost of $5, and replacement cost of $4.50 Part B: 75 units with a cost of $6, and replacement cost of $6.50 Part C: 160 units with a cost of $3, and replacement cost of $2.50 Under the lower of cost or market method, the total value of this company's ending inventory is: O $1,180.00 O $1.217.50. O $1,112.50 O $1,137.50. O $1,075.00. A company had the following purchases and sales during its first year of operations: January: February: May: September: November: Purchases 10 units at $120 20 units at $125 15 units at $130 12 units at $135 10 units at $140 Sales 6 units 5 units 9 units 8 units 13 units On December 31, there were 26 units remaining in ending inventory. Using the perpetual FIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.) O $3,405. O $3,200. $3,365. $3,270. $3,540