1.
Which of the following should not be included in the physical inventory of a company?
A.
Goods held on consignment from another company.
B.
Goods shipped on consignment to another company.
C.
Goods in transit from another company shipped FOB shipping point.
D.
None of these.


2.
The cost flow method that often parallels the actual physical flow of merchandise is the
A.
FIFO method.
B.
LIFO method.
C.
average-cost method.
D.
gross profit method.


3.
In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the
A.
FIFO method.
B.
LIFO method.
C.
average cost method.
D.
tax method.


4.
Rickety Company purchased 1,000 widgets and has 200 widgets in its ending inventory at a cost of $91 each and a current replacement cost of $80 each. The ending inventory under lower of cost or market is
A.
$91,000.
B.
$80,000.
C.
$18,200.
D.
$16,000.


5.
Atlantis Company's ending inventory is understated $4,000. The effects of this error on the current year's cost of goods sold and net income, respectively, are
A.
understated, overstated.
B.
overstated, understated.
C.
overstated, overstated.
D.
understated, understated.


6.
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
A.
73 days.
B.
121.7 days.
C.
102.5 days.
D.
84.5 days.


7.
A new average cost is computed each time a purchase is made in the
A.
average cost method.
B.
moving-average cost method.
C.
weighted-average cost method.
D.
all of these methods.


8.
Songbird Company has sales of $150,000 and cost of goods available for sale of $135,000. If the gross profit rate is 30%, the estimated cost of the ending inventory under the gross profit method is
A.
$15,000.
B.
$30,000.
C.
$45,000.
D.
$75,000.



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