Question

Multiple Choice Questions
1. Goods on consignment should be included in the inventory of:
a. The consignor but not the consignee
b. Both the consignor and the consignee
c. The consignee but not the consignor
d. Neither the consignor nor the consignee
2. The following items were included in Venicio Corporation’s inventory account on December 31, 2016:
Merchandise out on consignment,
at sales price, including 40% markup
on selling price ............... $14,000
Goods purchased, in transit, shipped
FOB shipping point .............. 1 2,000
Goods held on consignment by Venicio ...... 9,000
What amount should Venicio report as inventory at December 31, 2016?
a. $21,000
b. $20,400
c. $26,000
d. $35,000
3. During 2016, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of cocoa beans at $1.00 per pound, delivery to be made in the spring of 2017. Because a record harvest is predicted for 2017, the price per pound for cocoa beans had fallen to $0.80 by December 31, 2016. Of the following journal entries, the one that would properly reflect in 2016 the effect of the commitment of R Corp. to purchase the 100,000 pounds of cocoa is:
4. Dixon Menswear Shop purchased shirts from Colt Company on May 28, 2016, and received an invoice with a list price amount of $5,000 and payment terms of 2/10, n/30. Dixon uses the net method to record purchases. Dixon should record purchases of:
a. $4,000
b. $4,900
c. $5,000
d. $5,100
5. The moving average inventory cast flow assumption is applicable to which of the following inventory systems?
6. City Stationers Inc. had 200 calculators on hand on January 1, 2016, costing $18 each. Purchases and sales of calculators during the month of January were as follows:
City uses a periodic inventory system. According to a physical count, 150 calculators were on hand at January 31, 2016.
The cost of the inventory on January 31, 2016, under the FIFO method is:
a. $400
b. $2,700
c. $3,100
d. $3,200
7. City Stationers Inc. had 200 calculators on hand on January 1, 2016, costing $18 each. Purchases and sales of calculators during the month of January were as follows:
City uses a periodic inventory system. According to a physical count, 150 calculators were on hand at January 31, 2016.
The cost of the inventory on January 31, 2016, under the LIFO method is:
a. $400
b. $2,700
c. $3,100
d. $3,200
8. Assuming no beginning inventory, what can be said about the trend of inventory prices if cost of goods sold computed when inventory is valued using the FIFO method exceeds cost of goods sold when inventory is valued using the LIFO method?
a. Prices decreased.
b. Prices remained unchanged.
c. Prices increased.
d. Price trend cannot be determined from information given.
9. On December 31, 2015, Kern Company adopted the dollar value LIFO inventory method. All of Kern’s inventories constitute a single pool. The inventory on December 31, 2015, using the dollar value LIFO inventory' method was $600,000. Inventory data for 2016 are as follows:
Dec. 31, 2016 inventory at year-end prices ........ $780,000
Relevant cost index at year-end (base year 2015) ....... 120
Under the dollar value LIFO inventory method, Kern’s inventory method, Kern’s inventory on December 31, 2016, would be:
a. $650,000
b. $655,000
c. $660,000
d. $720,000
10. When the double-extension approach to the dollar-value LIFO inventory' cost flow method is used, the inventory' layer added in the current year is multiplied by an index number. How would the following be used in the calculation of this index number?


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