Chap 7 TRUE/FALSE

Cost of goods sold = Beginning inventory + Purchases - Ending inventory

TRUE

Ending inventory = Beginning inventory + Purchases - Cost of goods sold

TRUE

Inventory is reported on the balance sheet as a current asset

TRUE

The cost assigned to cost of goods sold and to inventory under the FIFO method will be the same whether the perpetual or the periodic inventory system is used

TRUE

The primary goals of inventory are to maintain a sufficient quantity of inventory to meet customer's needs, ensure inventory quality meets customer's expectations and company standards, and minimize the cost of acquiring and carrying inventory

TRUE

When a company sells goods, it removes their cost from the inventory account the cost on the income statement Cost of Goods Sold

TRUE

An overstatement of ending inventory will cause an overstatement of assets and an understatement of stockholders equity on the balance sheet

FALSE

Consignment inventory is reported on the balance sheet of the company holding the inventory

FALSE

Goods placed in inventory are initially recorded at market value

FALSE

If inventory is sold with terms of FOB shipping point, the goods belong to the seller while in transit

FALSE