ACC 201 Ch 6 Quiz

Items should be included as part of the company's inventory if they are

d. purchased from a creditor, although not paid for by year end.

Aaron Corporation is a merchandising company. Selected account balances are listed below:Sales$250,000Purchases112,500Beginning Inventory8,000Ending Inventory15,000Operating Expenses74,000Income Tax Expense5,000Beginning Retained Earnings26,500Dividends7,500Refer to the information provided for Aaron Corporation. Calculate the Cost of Goods Sold.

c. $105,500

In a periodic inventory system, the cost of purchases is recognized as

c. an integral part of the calculation of cost of goods sold.

Satoor, Inc., which uses a periodic inventory system, purchased merchandise from Taye Company on July 7 for $15,000. The credit terms were 1/10, n/30. The goods were shipped FOB shipping point on July 7. Satoor, Inc. received the merchandise on July 10 and paid the amount due on July 15.Refer to the information provided for Satoor, Inc. Who is responsible for payment of the transportation costs on the merchandise sold?

c. buyer

If the amount assigned to ending inventory is incorrect,

d. both the balance sheet and income statement are affected.

Which of the following types of inventory accounts would be used by a wholesaler or retailer?

d. merchandise inventory

Dollar Town is a merchandising company that uses the periodic inventory system. Selected account balances are listed below:Sales$105,000Purchases54,000Beginning Inventory13,800Ending Inventory10,200Purchase Returns and Allowances1,800Purchase Discounts4,200Transportation-in2,400Sales Discounts4,800Sales Returns and Allowances3,000 Refer to the information provided for Dollar Town. Calculate net sales.

a. $97,200

Satoor, Inc., which uses a periodic inventory system, purchased merchandise from Taye Company on July 7 for $15,000. The credit terms were 1/10, n/30. The goods were shipped FOB shipping point on July 7. Satoor, Inc. received the merchandise on July 10 and paid the amount due on July 15.Refer to the information provided for Satoor, Inc. When did title to the merchandise transfer from the seller to the buyer?

a. July 7

Which inventory cost flow method assigns the cost of the most recent items purchased to cost of goods sold?

a. LIFO

How are purchase returns and purchase discounts recorded by a company using the periodic inventory system?

a. in contra-accounts to the Purchases account

In order to determine inventory for its balance sheet, a company must count the inventory at the end of its accounting period according to

a. the periodic inventory system.

Which inventory cost flow method assigns the same cost to all units whether sold or left in ending inventory?

b. weighted average cost

Stallworth Corp. uses a periodic inventory system. The following information is available for the month of November:Nov.1 On hand, 50 units at $15 each$750.00 5 Purchased, 115 units at $15.10 each$1,736.50 16 Purchased, 75 units at $15.20 each$1,140.00 Total cost of goods available for sale$3,626.50 30 On hand, 100 units Refer to the information provided for Stallworth Corp. How many units did the company sell during November?

c. 140

The amount recognized on the balance sheet as the cost of inventory will ultimately be recognized as

c. cost of goods sold.

The inventory account a manufacturer uses to record the cost of products completed and available for sale is called

c. finished goods inventory

Ending inventory is equal to the cost of items on hand plus

c. merchandise in transit sold to customers with terms FOB destination.

The cost of goods sold is equal to

c. the cost of goods available for sale less ending inventory.

Cost of goods sold is equal to

c. the cost of merchandise purchased plus transportation costs plus beginning inventory minus purchase returns and allowances and purchased discounts minus ending inventory.

Which inventory cost flow method assigns the cost of the most recent items purchased to ending inventory?

d. FIFO