Inventory should be reported as follows except

a.according to the chosen cost flow assumption.

b.as a current asset on the balance sheet.

c.as a long-term asset on the balance sheet.

d.at lower of cost or market.

Inventory turnover is computed as

a.Average Inventory divided by Sales.

b.Average Inventory divided by Average Daily Cost of Goods Sold.

c.Sales divided by Cost of Goods Sold.

d.Cost of Goods Sold divided by Average Inventory.

Financial statement data at December 31 for Ecco Company are as follows:

Cost of goods sold	$552,500
Inventories:
Beginning of year	200,000
End of year	140,000

Determine inventory turnover for the year.

a.3.95

b.1.63

c.2.76

d.3.25

Estimating inventory may be needed for all of the following reasons except

a.when the periodic method is used instead of taking a physical inventory.

b.when it is impractical to take a physical inventory.

c.when monthly or quarterly financial statements are needed, but a physical inventory is taken only once a year.

d.when a fire has destroyed the inventory and inventory records.

When identical units of an item are purchased at different costs

a.an inventory cost flow method must be used under both a perpetual and a periodic inventory system.

b.an inventory cost flow method must be used under a perpetual inventory system only.

c.an inventory cost flow method is not used under either a perpetual or a periodic inventory system.

d.an inventory cost flow method must be used under a periodic inventory system only.

Determine the cost of goods sold for the transaction on September 25 using the perpetual inventory system and the FIFO method.

Date	Item	Units	Cost	Total
	Beginning inventory	5	$5	$25
September 4	Purchase	8	6	48
September 8	Sale	6
September 20	Purchase	15	7	105
September 25	Sale	12

a.$105

b.$84

c.$73

d.$77