Question 1

Taking a physical count of inventory

A)	is not necessary when a periodic inventory system is used
B)	should be done near year-end
C)	has no internal control relevance
D)	is not necessary when a perpetual inventory system is used

Question 2

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items?

A)	FIFO
B)	LIFO
C)	average
D)	specific identification

Question 3

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Blankets	Units	Cost
May 3	Purchase	5	$20
10	Sale	3
17	Purchase	10	$24
20	Sale	6
23	Sale	3
30	Purchase	10	$30

Assuming that the company uses the perpetual inventory system, determine the ending inventory value for the month of May using the FIFO inventory cost method.

A)	$364
B)	$372
C)	$324
D)	$320

Question 4

Use the information below to answer the following questions. The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Blankets	Units	Cost
May 3	Purchase	5	$20
10	Sale	3
17	Purchase	10	$24
20	Sale	6
23	Sale	3
30	Purchase	10	$30

Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method.

A)	$324
B)	$372
C)	$320
D)	$364

Question5:

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Blankets	Units	Cost
May 3	Purchase	5	$20
10	Sale	3
17	Purchase	10	$24
20	Sale	6
23	Sale	3
30	Purchase	10	$30

Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.

	A)$108
	B)$120
	C)$72
	D)$180

Question 6

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Blankets	Units	Cost
May 3	Purchase	5	$20
10	Sale	3
17	Purchase	10	$24
20	Sale	6
23	Sale	3
30	Purchase	10	$30

Assuming that the company uses the perpetual inventory system, determine the gross profit for the month of May using the LIFO cost method.

A)	$348
B)	$452
C)	$444
D)	$356

Question 7

The following units of an inventory item were available for sale during the year:

Beginning inventory	10 units at $55
First purchase	25 units at $60
Second purchase	30 units at $65
Third purchase	15 units at $70

The firm uses the periodic inventory system. During the year, 60 units of the item were sold.

The value of ending inventory rounded to nearest dollar using average cost is:

A)	$1,353
B)	$1,263
C)	$1,375
D)	$1,150

Question 8

If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

A)	average cost
B)	LIFO
C)	FIFO
D)	weighted average

Question 9

Determine the total value of the merchandise using net realizable value.

Item	Quantity	Selling Price	Commission
Doll	10	$7	$2
Horse	5	9	3

A)	$35
B)	$80
C)	$115
D)	$25

Question 10

If a company values inventory at the lower of cost or market, which of the following is the value of merchandise inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole.

Item	Inventory Quantity	Unit Cost Price	Unit Market Price
Product C	420	$6	$5
Product D	370	12	14

A)	$6,960
B)	$7,700
C)	$6,540
D)	$7,280

Question 11

For the year ended December 31, Depot Maxs cost of merchandise sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Compute Depot Maxs inventory turnover for the year.

	A)8.7
	B)7.8
	C)8.3
	D)44.0

Question 12

For the year ended December 31, Depot Maxs cost of merchandise sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Maxs number of days' sales in inventory is closest to

A)	42
B)	46
C)	8
D)	44