Goals Achievement: Chapter Eight
Goods in transit should never be included in the buyer's inventory.
Goods on consignment should be included in the accounts of the:
Under which inventory cost-flow assumption would the most recent cost be assigned to the Inventory account on the balance sheet?
Under the weighted-average inventory method, the average unit cost of inventory is determined by dividing the sum of the individual purchase prices by the number of purchases which occurred during the year.
The specific identification method would be used for inventory which involves many similar homogeneous items.
During a period of rising prices, which inventory method would tend to minimize tax liability?
During a time of rising prices, the LIFO technique causes inventory on the balance sheet to bear what relationship to its fair value?
In a perpetual inventory system, which account is not utilized?
Which inventory method produces the same results under both the perpetual and periodic inventory systems?
In determining inventory's lower-of-cost-or-market valuation, market is defined as:
The lower-of-cost-or-market rule can be applied item-by-item or to the aggregate inventory.
Recoveries of value for inventory previously reduced by lower-of-cost-or-market rule adjustments should be recognized.
Under the gross profit method, ending inventory is determined by multiplying net purchases by the estimated gross profit percentage.
Under the retail inventory method, the estimated ending inventory can be determined by multiplying the cost-to-retail percentage times the:
The denominator of the inventory turnover ratio calculation includes:
Overstating ending inventory would have what effect on income for that year?
The impact of inventory errors on income tends to be counter-balanced by offsetting errors in the following accounting period.