Accounting 201A Ch.6

Last-In, First-Out (LIFO) Method

Days in Inventory

Consigned Goods

Current Replacement Costs

Lower-of-cost-or-market (LCM)

FOB Shipping Point

FOB Destination

Just-in-time Inventory

Average-Cost Method

LIFO Reserve

In order to be classified as merchandise inventory, merchandise must be

General Motors would classify automobiles on the assembly line in various stages of completion as

When purchases of merchandise are recorded in the Purchases account rather than the Inventory account the inventory system being used is the

To determine cost of goods sold under a periodic inventory system, all of the following are necessary except: a. total cash register receipts for the period. b. record purchases of merchandise c. determine the cost of goods purchased d. determine the cost of goods on hand at the beginning and end of the accounting period.

In some lines of business, it is customary to hold the goods of other parties and try to sell the goods for them for a fee. These goods are called:

When legal title of the goods remains with the seller until the goods reach the buyer the terms are said to be:

The three assumed cost flow methods are:

Which of the following statements are not true regarding LIFO: a. Assumes the latest goods purchased are the first to be sold. b. Seldom coincides with the actual physical flow of inventory. c. Ending inventory is based on the price of the most recent units purchased. d. Ending inventory obtained by taking the unit cost of the earliest goods available for sale and working forward until all units of inventory have been costed.

In a period of increasing prices, the inventory system that will yield the highest net income is:

Under lower-of-cost-or-market (LCM), market is defined as

Costs of Good Sold formula in periodic system

lower-of-cost-or-market

When is a physical inventory usually taken?

As a result of a thorough physical inventory, Railway Company determined that it had inventory worth $180,000 at December 31, 2014. This count did not take into consideration the following facts. Rogers Consignment store currently has goods worth $35,000 on its sales floor that belong to Railway but are being sold on consignment by Rogers. The selling price of these goods is $50,000. Railway purchased $13,000 of goods that were shipped on December 27, FOB destination, that will be received by Railway on January 3. Determine the correct amount of inventory that Railway should report.

In periods of rising prices, LIFO will produce

Considerations that affect the selection of an inventory costing method do not include:

The lower-of-cost-or-market rule for inventory is an example of the application of

Which of these would cause inventory turnover to increase the most? a) Increasing the amount of inventory on hand. (b) Keeping the amount of inventory on hand constant but increasing sales. (c) Keeping the amount of inventory on hand constant but decreasing sales. (d) Decreasing the amount of inventory on hand and increasing sales.

Carlos Company had beginning inventory of $80,000, ending inventory of $110,000, cost of goods sold of $285,000, and sales of $475,000. Carlos's days in inventory is:

In a perpetual inventory system

Fran Company's ending inventory is understated by $4,000. The effects of this error on the current year's cost of goods sold and net income, respectively, are

Harold Company overstated its inventory by $15,000 at December 31, 2014. It did not correct the error in 2014 or 2015. As a result, Harold's stockholders' equity was

Inventory Turnover Ratio

Days in inventory