Accounting

n analysis of the inventory owned by Owens Company as of the Company's fiscal closing date is shown in the following table. Item Quantity Cost per Unit Market Value per Unit A 200 $ 20 $ 17 B 190 $ 50 $ 52 C 400 $ 34 $ 30 D 320 $ 25 $ 29 Assuming Owens applies the lower of cost or market rule on an individual basis, the Company would be required to recognize an expense amounting to: $1,660. $2,200. $3,860.

$2,200.

Weiss Company purchased two identical inventory items. The first purchase cost $30 and the second cost $32. The Company sold one of the items for $40. If the Company uses the LIFO cost flow method, the balance in the inventory account after the sales transaction will be $32. $31. $30. $8.

$30.

An analysis of the inventory owned by Owens Company as of the Company's fiscal closing date is shown in the following table. Item Quantity Cost per Unit Market Value per Unit A 200 $ 20 $ 17 B 190 $ 50 $ 52 C 400 $ 34 $ 30 D 320 $ 25 $ 29 Assuming Owens applies the lower of cost or market rule on an individual basis the amount of inventory shown on the balance sheet would be 32,900. $35,100. $34,560. $33,540.

$32,900.

The following information was drawn from the inventory records of Alpha Company as of December, Year 2. Beginning inventory (purchased in Year 1) 200 Units @ $5 each Purchases made in Year 2 800 Units @ $8 each Units Sold 900 Units @ $12 each Which of the following is the amount of the gross margin shown on the Year 2 income statement assuming Alpha uses a weighted average cost flow method? $500 $800 $4,140 $6,660

$4,140

he following information was drawn from the inventory records of Alpha Company as of December 31, Year 2. Beginning inventory (purchased in Year 1) 200 Units @ $5 each Purchases made in Year 2 800 Units @ $8 each Units Sold 900 Units @ $12 each Which of the following is the amount of the gross margin assuming Alpha uses a FIFO cost flow method? $500 $800 $4,200 $6,600

$4,200

The following information was drawn from the inventory records of Alpha Company as of December, Year 2. Beginning inventory (purchased in Year 1) 200 Units @ $5 each Purchases made in Year 2 800 Units @ $8 each Units Sold 900 Units @ $12 each Which of the following is the amount of the gross margin shown on the Year 2 income statement assuming Alpha uses a LIFO cost flow method? $3,900 $6,900 $4,200 $6,600

$6,900

Weiss Company purchased two identical inventory items. The first purchase cost $30 and the second cost $32. The Company sold one of the items for $40. If the Company uses the weighted average cost flow method, the amount of gross margin shown on the income statement will be $12. $8. $10. $9.

$9.

Which of the following formulas is used to calculate the number of days to sell inventory? Inventory turnover ÷ 365 Inventory turnover × 365 365 ÷ Inventory turnover 365 × Gross margin

365 ÷ Inventory turnover

he following information was drawn from the accounting records of Kassouf Sales Company (KSF). Sales Revenue $ 124,000 Cost of Goods Sold 90,000 Gross Margin $ 34,000 The inventory account showed a $17,000 beginning balance and a $19,000 ending balance. Based on this information, the inventory turnover ratio is (if necessary round calculations to two decimal points) 5.00 times. 2.65 times. 1.36 times. 6.89 times.

5.00 times.

Assume a company paid $800 for a computer that it plans to sell to its customers. Suppose that as a result of new technology the company could buy the same computer today for $600. Which of the following journal entries would be required to show the inventory at the lower of cost or market?

Account Titles Debit Credit Cost of Goods Sold 200 Inventory 200

Which of the following formulas is used to calculate the inventory turnover ratio? ventory ÷ Cost of goods sold Inventory ÷ Net sales Net income ÷ Inventory Cost of goods sold ÷ Inventory

Cost of goods sold ÷ Inventory

AAP requires that inventory be shown on the balance sheet at its cost (the price paid) regardless of its current value. This statement is

False

Which of the following cost flow methods would provide the lowest amount of net income in an inflationary environment? FIFO LIFO Weighted average NIFO

LIFO

The cash flow associated with buying and selling inventory is not affected by the inventory cost flow method. This statement is

True

All other things being equal, the profitability is maximized when a company sells inventory with a high gross margin per unit and a high inventory turnover. a high gross margin per unit and a low inventory turnover. a low gross margin per unit and a high inventory turnover.

a high gross margin per unit and a high inventory turnover.