Which cost flow assumption generally results in the highest reported amount of net income in periods of rising inventory costs?

Multiple Choice

• LIFO.

• FIFO.

• Weighted-average.

• Income will be the same under each assumption.

Which cost flow assumption must be used for financial reporting if it is also used for tax reporting?

Multiple Choice

• LIFO.

• FIFO.

• Weighted-average.

Under a perpetual inventory system:

Multiple Choice

• Cost of good sold is recorded with a period-end adjusting entry.

• Purchase discounts are not recorded.

• Inventory purchases are recorded only at the end of the period.

Inventory records for Dunbar Incorporated revealed the following:

Date		Transaction	Number of Units			Unit Cost
Apr.	1	Beginning inventory		430		$	2.17
Apr.	20	Purchase		330			2.70

Dunbar sold 620 units of inventory during the month. Ending inventory assuming LIFO would be: (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)

Multiple Choice

• $304.

• $933.

• $378.

• $891.

Inventory records for Dunbar Incorporated revealed the following:

Inventory records for Dunbar Incorporated revealed the following:

Date		Transaction	Number of Units			Unit Cost
Apr.	1	Beginning inventory		550		$	2.34
Apr.	20	Purchase		330			2.64

Dunbar sold 650 units of inventory during the month. Ending inventory assuming weighted-average cost would be: (Round weighted-average unit cost to 4 decimal places and final answer to the nearest dollar amount.)

Multiple Choice

• $564.

• $624.

• $573.

• $532.

The following information pertains to Julia & Company:

March		1		Beginning inventory = 26 units @ $5.80
March		3		Purchased 21 units @ 4.00
March		9		Sold 30 units @ 8.40

  
What is the cost of goods sold for Julia & Company assuming it uses LIFO? (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)

Multiple Choice

• $122.

• $136.

• $120.

Inventory records for Marvin Company revealed the following:

Date		Transaction	Number of Units			Unit Cost
Mar.	1	Beginning inventory		980		$	7.19
Mar.	10	Purchase		590			7.62
Mar.	16	Purchase		710			8.12
Mar.	23	Purchase		540			8.52

Marvin sold 1,890 units of inventory during the month. Cost of goods sold assuming FIFO would be: (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)

Multiple Choice

• $14,590.

• $16,103.

• $15,221.

A company's sales equal $60,000 and cost of goods sold equals $20,000. Its beginning inventory was $1,600 and its ending inventory is $2,400. The company's inventory turnover ratio equals:

Multiple Choice

• 5 times.

• 10 times.

• 20 times.

• 30 times.

Anthony Corporation reported the following amounts for the year:

Net sales	$	296,000
Cost of goods sold		138,000
Average inventory		50,000

Anthony's average days in inventory is: (Round to the nearest whole day.)

Multiple Choice

• 170 days.

• 114 days.

• 132 days.

• 151 days.

Anthony Corporation reported the following amounts for the year:

Net sales	$	296,000
Cost of goods sold		138,000
Average inventory		50,000

Anthony's gross profit ratio is:

Multiple Choice

• 53.4%.

• 51.9%.

• 50.3%

Answer rating: 100% (QA)

Answer Question 1 Which cost flow assumption generally results in the highest reported amount of net income in periods of rising inventory costs Answer FIFO Explanation FIFO FirstIn FirstOut assumes t... View the full answer