Question 1 of 20 5.0 Points
The _________ method of inventory valuation uses the quantity times price equals cost concept of the basic business transaction.
A. specific identification
B. original cost
C. specific cost
D. average cost
Question 2 of 20 5.0 Points
The _________ method for determining the value of ending inventory closely resembles the way a company actually moves its physical inventory.
A. specific identification
B. FIFO
C. LIFO
D. inventory sold
Question 3 of 20 5.0 Points
The _________ method uses the cost ratio to estimate the value of ending inventory.
A. retail
B. gross margin
C. average cost
D. specific cost
Question 4 of 20 5.0 Points
Since continuous inventory systems are not common, most businesses use a _________ system.
A. current market value
B. periodic inventory
C. current cost estimate
D. specific identification
Question 5 of 20 5.0 Points
_________ is a method used to value inventory that assumes purchases made during the first part of the year will be sold first.
A. Current cost estimate
B. Replacement value
C. LIFO
D. FIFO
Question 6 of 20 5.0 Points
Goods that are owned by the business and held for resale are called:
A. stock.
B. merchandise.
C. materials.
D. inventory.
Question 7 of 20 5.0 Points
The _________ method employs the percentage of sales revenues to determine cost of goods sold and the estimated value of ending inventory.
A. market value
B. replacement value
C. gross margin
D. cost estimate
Question 8 of 20 5.0 Points
Inventory may be valued at either the cost of the unit or at the current market value – whichever is lower. The name of this rule is the _________ method.
A. valuation
B. market value
C. lower of cost or market
D. replacement value
Question 9 of 20 5.0 Points
Please use the following information to answer questions 9-10.
Beginning Inventory 600 units @ $3.50 per unit
Purchases:
January 20th 1,200 units @ $4.00 per unit
February 20th 1,500 units @ $3.76 per unit
March 20th 1,000 units @ $3.80 per unit
Ending Inventory 800 units
Using the average cost method, what is ending inventory valued at?
A. $2,976.42
B. $3,040.00
C. $3,999.00
D. $4,694.12
Question 9 of 20 5.0 Points
Please use the following information to answer questions 9-10.
Beginning Inventory 600 units @ $3.50 per unit
Purchases:
January 20th 1,200 units @ $4.00 per unit
February 20th 1,500 units @ $3.76 per unit
March 20th 1,000 units @ $3.80 per unit
Ending Inventory 800 units
Using the average cost method, what is ending inventory valued at?
A. $2,976.42
B. $3,040.00
C. $3,999.00
D. $4,694.12
Question 10 of 20 5.0 Points
If the current market value of the good was $3.75 per unit on March 30 (when ending inventory for the quarter was recorded), and the lower-of-cost-or-market method is used, then the value of ending inventory:
A. would not change.
B. would increase by $40.
C. would decrease by $40.
D. would decrease by $400.
Question 11 of 20 5.0 Points
Please use the following information to answer questions 11-13.
A firm has the following inventory information for the first quarter:
01/01 Beginning Inventory 50 units @ $5
01/15 Purchases 80 units @ $5.50
02/15 Purchases 60 units @ $5.25
02/15 Purchases 40 units @ $5.75
Sales 170 units @ $10
Total operating expenses $500
What is ending inventory under FIFO?
A. $305
B. $322.17
C. $335
D. $350
Question 12 of 20 5.0 Points
What is the cost of goods sold under FIFO?
A. $770
B. $800
C. $900
D. $930
Question 13 of 20 5.0 Points
What is net profit under LIFO?
A. $250
B. $270
C. $300
D. $330
Question 14 of 20 5.0 Points
Please use the following information for questions 14-15.
Mahalyk's Water Fun Shoppe specializes in jet skis. Mahalyk's inventory records showed the following for the past year.
Purchase Date Number of Jet Skis Cost Per Jet Ski
February 10 30 $4,000
May 12 80 $3,000
June 15 20 $3,500
July 20 15 $2,500
Use the LIFO method to determine Mahalyk's value of ending inventory at the end of July if they had 70 jet skis left in inventory.
A. $230,625
B. $240,000
C. $255,000
D. $212,500
Question 15 of 20 5.0 Points
Use the FIFO method to determine Mahalyk's value of ending inventory at the end of July if they had 70.5 jet skis left in inventory.
A. $230,625
B. $210,000
C. $255,000
D. $212,500
Question 16 of 20 5.0 Points
Estimate the cost of ending inventory based on the retail method using the following information:
Cost Retail
Beginning Inventory $ 600,000 $ 800,000
Purchases $ 450,000 $ 600,000
Net Sales $1,000,000
A. $150,000
B. $262,500
C. $300,000
D. $750,000
Question 17 of 20 5.0 Points
Question 17 of 20
A firm has beginning inventory of $50,000 and purchases of $290,000 for an accounting period. Sales totaled $400,000, and typical gross margin as a percentage of sales has been 30%. Using the gross margin method, what is the estimated ending inventory?
A. $60,000
B. $75,000
C. $90,000
D. $120,000
Question 18 of 20 5.0 Points
(retail method) for Twilight Games and Comics Store if the cost of goods available for sale is $36,000 and the retail value of goods available for sale is $90,000 (round to the nearest one-thousandth).
A. 2.500
B. 0.667
C. 0.400
D. 2.000
Question 19 of 20 5.0 Points
Estimate the cost of ending inventory for August for Roman's Jewelry Store using the retail method on the following data:
Cost Retail
Beginning inventory for August $180,000 $288,000
Purchases during August $70,000 $112,000
Net sales during August $80,000
A. $50,000
B. $156,250
C. $200,000
D. $128,000
Question 20 of 20 5.0 Points
Herman's Confectionery Shoppe has a beginning inventory at cost of $22,000, and purchases at cost of $5,000 during the month of February. Retail sales for February were $8,000 and the gross margin for the month was assumed to be 45%. Estimate the value of ending inventory for February.
A. $4,400
B. $3,600
C. $22,600
D. $18,400
The _________ method of inventory valuation uses the quantity times price equals cost concept of the basic business transaction.
A. specific identification
B. original cost
C. specific cost
D. average cost
Question 2 of 20 5.0 Points
The _________ method for determining the value of ending inventory closely resembles the way a company actually moves its physical inventory.
A. specific identification
B. FIFO
C. LIFO
D. inventory sold
Question 3 of 20 5.0 Points
The _________ method uses the cost ratio to estimate the value of ending inventory.
A. retail
B. gross margin
C. average cost
D. specific cost
Question 4 of 20 5.0 Points
Since continuous inventory systems are not common, most businesses use a _________ system.
A. current market value
B. periodic inventory
C. current cost estimate
D. specific identification
Question 5 of 20 5.0 Points
_________ is a method used to value inventory that assumes purchases made during the first part of the year will be sold first.
A. Current cost estimate
B. Replacement value
C. LIFO
D. FIFO
Question 6 of 20 5.0 Points
Goods that are owned by the business and held for resale are called:
A. stock.
B. merchandise.
C. materials.
D. inventory.
Question 7 of 20 5.0 Points
The _________ method employs the percentage of sales revenues to determine cost of goods sold and the estimated value of ending inventory.
A. market value
B. replacement value
C. gross margin
D. cost estimate
Question 8 of 20 5.0 Points
Inventory may be valued at either the cost of the unit or at the current market value – whichever is lower. The name of this rule is the _________ method.
A. valuation
B. market value
C. lower of cost or market
D. replacement value
Question 9 of 20 5.0 Points
Please use the following information to answer questions 9-10.
Beginning Inventory 600 units @ $3.50 per unit
Purchases:
January 20th 1,200 units @ $4.00 per unit
February 20th 1,500 units @ $3.76 per unit
March 20th 1,000 units @ $3.80 per unit
Ending Inventory 800 units
Using the average cost method, what is ending inventory valued at?
A. $2,976.42
B. $3,040.00
C. $3,999.00
D. $4,694.12
Question 9 of 20 5.0 Points
Please use the following information to answer questions 9-10.
Beginning Inventory 600 units @ $3.50 per unit
Purchases:
January 20th 1,200 units @ $4.00 per unit
February 20th 1,500 units @ $3.76 per unit
March 20th 1,000 units @ $3.80 per unit
Ending Inventory 800 units
Using the average cost method, what is ending inventory valued at?
A. $2,976.42
B. $3,040.00
C. $3,999.00
D. $4,694.12
Question 10 of 20 5.0 Points
If the current market value of the good was $3.75 per unit on March 30 (when ending inventory for the quarter was recorded), and the lower-of-cost-or-market method is used, then the value of ending inventory:
A. would not change.
B. would increase by $40.
C. would decrease by $40.
D. would decrease by $400.
Question 11 of 20 5.0 Points
Please use the following information to answer questions 11-13.
A firm has the following inventory information for the first quarter:
01/01 Beginning Inventory 50 units @ $5
01/15 Purchases 80 units @ $5.50
02/15 Purchases 60 units @ $5.25
02/15 Purchases 40 units @ $5.75
Sales 170 units @ $10
Total operating expenses $500
What is ending inventory under FIFO?
A. $305
B. $322.17
C. $335
D. $350
Question 12 of 20 5.0 Points
What is the cost of goods sold under FIFO?
A. $770
B. $800
C. $900
D. $930
Question 13 of 20 5.0 Points
What is net profit under LIFO?
A. $250
B. $270
C. $300
D. $330
Question 14 of 20 5.0 Points
Please use the following information for questions 14-15.
Mahalyk's Water Fun Shoppe specializes in jet skis. Mahalyk's inventory records showed the following for the past year.
Purchase Date Number of Jet Skis Cost Per Jet Ski
February 10 30 $4,000
May 12 80 $3,000
June 15 20 $3,500
July 20 15 $2,500
Use the LIFO method to determine Mahalyk's value of ending inventory at the end of July if they had 70 jet skis left in inventory.
A. $230,625
B. $240,000
C. $255,000
D. $212,500
Question 15 of 20 5.0 Points
Use the FIFO method to determine Mahalyk's value of ending inventory at the end of July if they had 70.5 jet skis left in inventory.
A. $230,625
B. $210,000
C. $255,000
D. $212,500
Question 16 of 20 5.0 Points
Estimate the cost of ending inventory based on the retail method using the following information:
Cost Retail
Beginning Inventory $ 600,000 $ 800,000
Purchases $ 450,000 $ 600,000
Net Sales $1,000,000
A. $150,000
B. $262,500
C. $300,000
D. $750,000
Question 17 of 20 5.0 Points
Question 17 of 20
A firm has beginning inventory of $50,000 and purchases of $290,000 for an accounting period. Sales totaled $400,000, and typical gross margin as a percentage of sales has been 30%. Using the gross margin method, what is the estimated ending inventory?
A. $60,000
B. $75,000
C. $90,000
D. $120,000
Question 18 of 20 5.0 Points
(retail method) for Twilight Games and Comics Store if the cost of goods available for sale is $36,000 and the retail value of goods available for sale is $90,000 (round to the nearest one-thousandth).
A. 2.500
B. 0.667
C. 0.400
D. 2.000
Question 19 of 20 5.0 Points
Estimate the cost of ending inventory for August for Roman's Jewelry Store using the retail method on the following data:
Cost Retail
Beginning inventory for August $180,000 $288,000
Purchases during August $70,000 $112,000
Net sales during August $80,000
A. $50,000
B. $156,250
C. $200,000
D. $128,000
Question 20 of 20 5.0 Points
Herman's Confectionery Shoppe has a beginning inventory at cost of $22,000, and purchases at cost of $5,000 during the month of February. Retail sales for February were $8,000 and the gross margin for the month was assumed to be 45%. Estimate the value of ending inventory for February.
A. $4,400
B. $3,600
C. $22,600
D. $18,400
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