Term
| the largest expense on the income statement of most merchandising compaanies is |
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Definition
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Term
| a perpetual inventory system offers all the following advantages except |
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Definition
| it is less expensive than a periodic system |
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Term
| if a company uses perpetual inventory system, which of the following entries are required to record the purchase of merchandise on credit? |
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Definition
Dr Inventory
Cr Accounts Payable |
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Term
| if a company uses a perpetual inventory system, which of the following entries are required to record the cost of merchandise sold on credit? |
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Definition
1. Accounts Receivable (Dr)
Sales (Cr)
2. Cost Of Goods Sold (Dr)
Inventory (Cr) |
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Term
| In a periodic inventory system the quantity of ending inventory is determined by: |
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Definition
| a physical inventory count |
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Term
Given the following data, what is the COGS
Sales Revenue
950,000
Beg. Invt.
120,000
End. Invt.
250, 000
Purchases
800,000 |
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Definition
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Term
What is the cost of Beg. Invt.
Sales revenue
650,000
cost of goods sold
475,000
end. invt.
150,000
purchases
620,000 |
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Definition
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Term
Given the following data, what is the weighted-average cost of end. invt. rounded to the nearest dollar.
sales revenue
100 units at $15 per unit
beg invt
40 units at $9 per unit
purchases
80 units at $10 per unit |
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Definition
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Term
Given the following data, what is the COGS at the determinded under the FIFO method?
sales revenue
100 units at $15 per unit
beg invt.
40 units at $9 per unit
purchases
80 units at $10 per unit |
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Definition
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Term
What is the end. invt. as determined under the LIFO costing method?
sales revenue
100 units at $15 per unit
beg. invt.
40 units at $9 per unit
purchases
80 units at $10 per unit |
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Definition
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Term
Calculate the cost of end. invt. using the periodic LIFO method
1/1 Beg Invt.---20 units at $10 per unit
3/5 Purchases---50 units at $12 per unit
5/30 Purchases---40 units at $13 per unit
10/25 Purchases---60 units at $14 per unit
12/31 End. Invt.---35 units |
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Definition
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Term
Calculate the cost of End Invt. using the weighted-average method:
1/1 Beg Invt---70 units at $10 per unit
3/5 Purchases---50 units at $12 per unit
5/30 Purchases--- 40 units at $13 per unit
10/25 Purchases---60 units at $14 per unit
12/31 End Invt---35 units |
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Definition
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Term
| when the FIFO method is used, End Invt. is assumed to consist of: |
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Definition
| the most recently purchased units |
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Term
| When the LIFO method is used, COGS is assumed to consist of: |
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Definition
| the most recently purchased units |
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Term
| When inventory prices are falling, the FIFO method will generally yield a gross margin that is: |
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Definition
| less than under the LIFO method |
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Term
| When prices are rising, the End. Invt. balance reported on a LIFO basis is generally |
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Definition
| lower than on a FIFO basis |
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Term
| when prices are decreasing, the End. Invt. balance reported on a FIFO basis is generally: |
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Definition
| lower than on a LIFO basis |
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Term
which of the following statements is generally true when prices are rising?
a. LIFO produces taxable income that exceeds taxable income under FIFO
b. FIFO results in paying less taxes than under LIFO
c. managers will use LIFO if they want to maximize income reported to sharholders.
d. the use of LIFO will result in paying less taxes than under FIFO |
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Definition
| D. the use of LIFO will result in paying less taxes than under FIFO |
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Term
| FIFO tends to decrease taxes when: |
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Definition
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Term
| The lower-of-cost-or-market rule is an application of: |
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Definition
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Term
| an error in the End. Invt. of a given accounting period: |
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Definition
| automatically creates errors in COGS for the current and next period. |
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Term
| If ending inventory for the current period is overstated by $3,500: |
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Definition
| net income of the next period will be understated by $3,500 |
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Term
| Inventory turnover is calculated as: |
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Definition
| COGS / avg inventory fr the period |
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Term
| which of the following statements about inventory turnover is the most appropriate? |
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Definition
| the most profitable turnover ratio may not necessarily be the highest |
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Term
| in a period of increasign prices, which inventory flow assumption will result in the lowest amount of income tax expence |
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Definition
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Term
| an error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. the effect of the this error in the current period is |
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Definition
COGS--Understated
NI--Overstated |
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Term
| Trane Co. purchased merchandise inventory with an invoice price of $4,000 and credit terms of 2/10 n/30. what is the net cost of the goods if trane co. pays within the discount period? |
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Definition
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Term
| when a customer returns merchandise purchased on credit, the retailer debits |
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Definition
| sales returns and allowances and credits accounts receivable |
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Term
| the respective normal account balances of sales, sales returns, and allowances, and sales discounts are |
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Definition
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Term
| gross profit for a merchandiser is net sales minus |
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Definition
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Term
| beginning inventory plus the COGP equals the |
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Definition
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Term
West Co. has the following acct balances
Purchases---35,000
sales R&A---4,000
purchase discount---2,500
freight-in---1,875
delivery expense---2,500
The COGP is |
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Definition
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Term
using the LIFO inventory method, the value of the ending inventory on June 30 is
June 1---150 Units---$750
June 10---200 Units---$1,200
June 15---200 Units---$1,260
June28---150 Units---$990
$4,200 |
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Definition
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Term
Using FIFO, the amount allocated of COGS for June is
June 1---150 Units---$750
June 10---200 Units---$1,200
June 15---200 Units---$1,260
June28---150 Units---$990
$4,200 |
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Definition
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Term
Using the average cost, the amount allocated to the End Invt on June 30 is
June 1---150 Units---$750
June 10---200 Units---$1,200
June 15---200 Units---$1,260
June28---150 Units---$990
$4,200 |
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Definition
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Term
| two categories of expenses in merchandising companies are |
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Definition
| cost of goods sold and operating exp |
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Term
| sales revenue less cost of goods sold is called |
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Definition
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Term
| after gross profit is calculated, operating expenses are deducted to determine |
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Definition
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Term
| detailed records of goods held for retail are not maintained under a |
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Definition
| periodic inventory system |
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Term
| in a perpetual inventory system, cost of goods sold is recorded |
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Definition
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Term
| if a company determines COGS each time a sale occurs, it |
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Definition
| uses perpetual inventory system |
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Term
| the journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit |
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Definition
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Term
| if a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the |
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Definition
| merchandise inventory acct will be increased |
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Term
| stone company purchased merchandise inventory with an invoice prise of $6,000 and credit of 2/10 n/30. what is the net of cost of goods if stone co. pays within the disocunt period? |
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Definition
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Term
| the sales returns and allowances acct is classsified as |
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Definition
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Term
| when goods are returned that relate to a prior cash sale |
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Definition
| the cash acct will be credited |
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Term
| the credit terms offered to a customer by a business firm were 2/10 n/30 which means that |
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Definition
| the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date |
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Term
| on the classified balance sheet, merchandise inventory is classified as |
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Definition
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Term
| a recommended internal control procedure for taking physical inventories is that the counting should be done by employees who do not have custodial responsibility for the inventory. this is an example of what type of internal control procedure? |
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Definition
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Term
Beginning Inventory
+ Purchases
- Ending Inventory
= |
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Definition
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Term
Sales
- Sales Returns
- Sales Allowances
- Sales Discounts
= |
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Definition
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Term
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Definition
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Term
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Definition
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Term
| On dec. 28, 2008, alpha co. submitted a purchase order to beta co. for goods costing $12,000. the terms of the perchase/sale were "FOB shipping point". on Dec 30the the goods were picked up at the betas warehouse by trucking co. the goods were delivered to alpha co. on Jan 4 2009. as of dec 31 2008 the goods should be included in the inventory of |
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Definition
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