Question 1

The inventory method that matches most recently acquired costs with current selling prices is:

Accepted Answer

LIFO (last-in, first-out) matches the most recently acquired costs with current selling prices by assuming that the last items purchased or produced are the first ones sold. This results in the most recent cost being matched with the current selling price. Therefore, LIFO is the best choice in this scenario.

Question 2

The advantage of the weighted-average method is:

Accepted Answer

The weighted-average method smooths out cost fluctuations by averaging costs over all units, leading to more stable net income compared to methods that assign different costs to different units.

Question 3

Individual inventory items are tracked in the:

Accepted Answer

Individual inventory items are tracked in the inventory ledger, which records information such as the quantity and cost of each item as well as any adjustments made to inventory levels. The accounts receivable ledger tracks customer payment histories, the purchases journal records purchases made by the business, and the accounts payable ledger tracks money owed to suppliers.

Question 4

The inventory method where the flow of goods and flow of costs are the same is:

Accepted Answer

The answer of The inventory method where the flow of...

Question 5

Customer returned goods purchased on credit - Perpetual
Debit ________ & ________ Credit ________ & ________

Accepted Answer

The answer of Customer returned goods purchased on credit -...

Question 6

Joe owns an auto parts store called Joe's Auto Care.The following transactions took place during July of the current year. July 8 Purchased merchandise on account from Wheeler Auto for $6,000 July 10 Paid freight charges of $400 on merchandise purchases on the 8^th. July 12 Sold merchandise on account to Lancaster Auto Sales for $5,500. The cost of the merchandise was $3,500 July 16 Received a credit memo from Wheeler for merchandise returned,$900 July 22 Issued a credit memo to Lancaster Auto Sales for merchandise returned,$1,000. The cost of the merchandise is $550. Journalize the above transactions using the perpetual inventory system.

Accepted Answer

The answer of Joe owns an auto parts store called...

Question 7

An entry to record the payment to a vendor was not recorded and posted to the general ledger but was posted to the subsidiary ledger.This error would cause:

Accepted Answer

The general ledger would show a higher balance for Accounts Payable than the subsidiary ledger because the payment was not recorded in the general ledger.

Question 8

Sold merchandise on account.- Perpetual
Debit ________ & ________ Credit ________ & ________

Accepted Answer

The answer of Sold merchandise on account.- Perpetual
Debit ________ &...

Question 9

Joe owns an auto parts store called Joe's Auto Care.The following transactions took place during September of the current year. September 9 Purchased merchandise on account from Wheeler Auto for $6,000. September 10 Paid freight charges of $300 on merchandise purchased on the 9^th. September 13 Sold merchandise on account to Lancaster Auto Sales for $5,500. The cost of the merchandise was $3,500. September 15 Received a credit memo from Wheeler for merchandise returned,$900 September 25 Issued a credit memo to Lancaster Auto Sales for merchandise returned,$1,000. The cost of the merchandise is $550. Journalize the above transactions using the periodic inventory system.

Accepted Answer

The answer of Joe owns an auto parts store called...

Question 10

Sold merchandise on cash - Periodic
Debit ________ Credit ________

Accepted Answer

The answer of Sold merchandise on cash - Periodic
Debit ________...

Question 11

This method assumes that the oldest goods are sold first.

Accepted Answer

FIFO, which stands for First-In, First-Out, assumes that the oldest inventory items are sold first, with the cost of these older items being used to calculate the cost of goods sold.

Question 12

Journalize the following assuming periodic inventory.
June 20 Made purchases of inventory for $4,500 on account.
June 21 Made sales of $3,500 cash and $2,500 credit.
June 22 Returned $2,000 of purchases for defects.

Accepted Answer

The answer of Journalize the following assuming periodic inventory.
June 20...

Question 13

The inventory method that assumes the recent goods are sold first is:

Accepted Answer

LIFO, which stands for Last In, First Out, assumes that the most recently purchased or produced items are sold first, leaving the older inventory in stock.

Question 14

One disadvantage of the LIFO method is that:

Accepted Answer

The LIFO method values ending inventory at the costs of the oldest items in stock, which may not reflect current market prices. As a result, the balance sheet may not accurately reflect the true value of the inventory, which could mislead investors and creditors.

Question 15

Prepare journal entries for the following transactions for Jane's Violin Shop applying the perpetual inventory system.Omit explanations.

Accepted Answer

The answer of Prepare journal entries for the following transactions...

Question 16

A purchases journal may be used to track inventory.

Accepted Answer

The answer of A purchases journal may be used to...

Question 17

An inventory ledger is used to track details of quantities and costs.

Accepted Answer

An inventory ledger is a record-keeping document used by businesses to track the details of quantities and costs of products held in inventory. It helps businesses efficiently manage their inventory levels and monitor the movement and value of inventory items.

Question 18

Prepare journal entries for the following transactions for HO Train Shop applying the perpetual inventory system.Omit explanations.

Accepted Answer

The answer of Prepare journal entries for the following transactions...

Question 19

The inventory method where the ending inventory consists of oldest costs is:

Accepted Answer

LIFO (Last-In, First-Out) assumes that the most recent inventory purchased is sold first, so the ending inventory consists of the oldest costs. This method is suitable for companies that want to minimize their taxable income, as it matches their high costs of goods sold with more recent, higher prices.

Question 20

The weighted-average method:

Accepted Answer

The weighted-average method calculates an average unit cost by dividing the total cost of goods available for sale by the total units of goods available for sale. This takes into account both the cost and the quantity of the goods available, providing a more accurate average unit cost than simply dividing the cost of goods sold by the units sold.

Quiz 15: Accounting for Merchandise Inventory

The inventory method that matches most recently acquired costs with current selling prices is:

The advantage of the weighted-average method is:

Individual inventory items are tracked in the:

The inventory method where the flow of goods and flow of costs are the same is:

Customer returned goods purchased on credit - Perpetual Debit & Credit &

An entry to record the payment to a vendor was not recorded and posted to the general ledger but was posted to the subsidiary ledger.This error would cause:

Sold merchandise on account.- Perpetual Debit & Credit &

Sold merchandise on cash - Periodic Debit Credit

This method assumes that the oldest goods are sold first.

Journalize the following assuming periodic inventory. June 20 Made purchases of inventory for $4,500 on account. June 21 Made sales of $3,500 cash and $2,500 credit. June 22 Returned $2,000 of purchases for defects.

The inventory method that assumes the recent goods are sold first is:

One disadvantage of the LIFO method is that:

Prepare journal entries for the following transactions for Jane's Violin Shop applying the perpetual inventory system.Omit explanations.

A purchases journal may be used to track inventory.

An inventory ledger is used to track details of quantities and costs.

Prepare journal entries for the following transactions for HO Train Shop applying the perpetual inventory system.Omit explanations.

The inventory method where the ending inventory consists of oldest costs is:

The weighted-average method:

Quiz 15: Accounting for Merchandise Inventory

The inventory method that matches most recently acquired costs with current selling prices is:

The advantage of the weighted-average method is:

Individual inventory items are tracked in the:

The inventory method where the flow of goods and flow of costs are the same is:

Customer returned goods purchased on credit - Perpetual Debit ________ & ________ Credit ________ & ________

An entry to record the payment to a vendor was not recorded and posted to the general ledger but was posted to the subsidiary ledger.This error would cause:

Sold merchandise on account.- Perpetual Debit ________ & ________ Credit ________ & ________

Sold merchandise on cash - Periodic Debit ________ Credit ________

This method assumes that the oldest goods are sold first.

Journalize the following assuming periodic inventory. June 20 Made purchases of inventory for $4,500 on account. June 21 Made sales of $3,500 cash and $2,500 credit. June 22 Returned $2,000 of purchases for defects.

The inventory method that assumes the recent goods are sold first is:

One disadvantage of the LIFO method is that:

Prepare journal entries for the following transactions for Jane's Violin Shop applying the perpetual inventory system.Omit explanations.

A purchases journal may be used to track inventory.

An inventory ledger is used to track details of quantities and costs.

Prepare journal entries for the following transactions for HO Train Shop applying the perpetual inventory system.Omit explanations.

The inventory method where the ending inventory consists of oldest costs is:

The weighted-average method:

Customer returned goods purchased on credit - Perpetual Debit & Credit &

Sold merchandise on account.- Perpetual Debit & Credit &

Sold merchandise on cash - Periodic Debit Credit