Statistic

Chapter 8 Practice Quiz

|

Chapter 8 Random Questions |

Question 1 | | 1 / 1 point |

Snappy, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as above:

On January 14, Snappy, Inc. sold 22 units of this product. The other 21 units remained in inventory at January 31.

Assuming that Snappy uses the FIFO flow assumption, the cost of goods sold to be recorded at January 14 is:

| | $306. |

| | $234. |

| | $318. |

| | Some other amount. |

Question 2 | | 1 / 1 point |

During periods of rising prices, and being primarily concerned with tax implications, most companies would select:

| | FIFO. |

| | LIFO. |

| | Specific identification. |

| | The inventory valuation does not affect taxation. |

Question 3 | | 1 / 1 point |

If the ending inventory is overstated in the current year:

| | Net income will also be overstated. |

| | Next year's beginning inventory will also be overstated. |

| | Next year's net income will be understated. |

| | All three of the above statements are correct. |

Question 4 | | 1 / 1 point |

Trinkets, Inc. purchased 1,000 monitors on January 5 at a per-unit cost of $175, and another 1,000 units on January 31 at a per-unit cost of $190. In the period from February 1 through year-end, the company sold 1,800 units of this product. At year-end, 200 units remained in inventory.

Assume that Trinkets, Inc. uses the LIFO flow assumption. The cost of the 200 units in the year-end inventory is:

| | $35,000. |

| | $38,000. |

| | $52,500. |

| | Some other amount. |

Question 5 | | 1 / 1 point |

Charlotte, Inc. uses a periodic inventory system. The purchases of a particular product during the year are shown above:

At December 31 the ending inventory consisted of 2,000 units.

Compute the cost of the ending inventory based on the LIFO method of inventory...