Xacc/280 Week 3 Quiz
UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE
PRINCIPLES OF ACCOUNTING I
ACCT220
FUN QUIZ SIX: CHAPTER SIX
I. Multiple Choice. Select the best lettered answer for the number question or best lettered completion for the numbered partial statement. Record the letter next to the number.
1. _____ Fetherston Company's goods in transit at December 31 include: sales made purchases made (1) FOB destination (3) FOB destination (2) FOB shipping point (4) FOB shipping point
Which items should be included in Fetherston's inventory at December 31?
a. (2) and (3)
b. (1) and (4)
c. (1) and (3)
d. (2) and (4) 2. _____ Cost of goods sold is computed from the following equation:
a. beginning inventory – cost of goods purchased + ending inventory. …show more content…
b. sales – cost of goods purchased + beginning inventory – ending inventory.
c. sales + gross profit – ending inventory + beginning inventory.
d. beginning inventory + cost of goods purchased – ending inventory.
3. _____ A company just starting business made the following four inventory purchases in June:
June 1 150 units $ 390
June 10 200 units 585
June 15 200 units 630
June 28 150 units 510 $2,115
A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is
a. $683.
b. $825.
c. $1,290.
d. $1,432.
ACCT220 Fun Quiz Six Chapter Six Continued: Page 2 of 4
4. _____ Indrisano's Used Cars uses the specific identification method of costing inventory. During March, Indrisano purchased three cars for $12,000, $14,400, and $19,200, respectively. During March, two cars are sold for a total of $34,600. Indrisano determines that at March 31, the $14,400 car is still on hand. What is Indrisano’s gross profit for March?
a. $1,000.
b. $3,400.
c.
$4,200.
d. $8,200. 5. _____ Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2014 are as follows: Units Per unit price Total
Balance, 1/1/14 200 $5.00 $1,000
Purchase, 1/15/14 100 5.30 530
Purchase, 1/28/14 100 5.50 550
An end of the month (1/31/14) inventory showed that 160 units were on hand. If the company uses FIFO, what is the value of the ending inventory?
a. $800
b. $832
c. $848
d. $868
6. _____ Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2014 are as follows: Units Per unit price Total
Balance, 1/1/14 200 $5.00 $1,000
Purchase, 1/15/14 100 5.30 530
Purchase, 1/28/14 100 5.50 550
An end of the month (1/31/14) inventory showed that 160 units were on hand. If the company uses LIFO, what is the value of the ending inventory?
a. $800
b. $832
c. $848
d. $868
ACCT220 Fun Quiz Six Chapter Six Continued: Page 3 of 4 7. _____ Eneri Company's inventory records show the following data: Units Unit Cost
Inventory, January 1 10,000 $9.20
Purchases: June 18 9,000 8.00 November 8 6,000 …show more content…
7.00
A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. If the company uses FIFO, what is the gross profit for the period?
a. $95,000
b. $99,266
c. $99,960
d.
$103,800
8. _____ Netta Shutters has the following inventory information.
Nov. 1 Inventory 30 units @ $8.00 8 Purchase 120 units @ $8.30 17 Purchase 60 units @ $8.40 25 Purchase 90 units @ $8.80
A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is
a. $738.
b. $792.
c. $1,740.
d. $1,794. 9. _____ The accountant at Almira Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of $8,190. The LIFO method will result in income before taxes of $7,290. What is the difference in tax that would be paid between the two methods?
a. $270.
b. $630.
c. $900.
d. Cannot be determined from the information provided.
10._____ An error in the physical count of goods on hand at the end of a period resulted in a $15,000 overstatement of the ending inventory. The effect of this error in the current period is Cost of Goods Sold Net Income
a. Understated Understated
b. Overstated Overstated
c. Understated Overstated
d. Overstated
Understated
ACCT220 Fun Quiz Six Chapter Six Concluded: Page 4 of 4
II. Problem. Evaluate each (separate) inventory error and determine whether it overstates or understates each item.
Inventory Error
Cost of Goods Sold
Net Income
Understates beginning inventory
Understates ending inventory
Overstates beginning inventory
Overstates ending inventory
*****END OF ACCT220 FUN QUIZ SIX: CHAPTER SIX*****
PRINCIPLES OF ACCOUNTING I
ACCT220
FUN QUIZ SIX: CHAPTER SIX
I. Multiple Choice. Select the best lettered answer for the number question or best lettered completion for the numbered partial statement. Record the letter next to the number.
1. _____ Fetherston Company's goods in transit at December 31 include: sales made purchases made (1) FOB destination (3) FOB destination (2) FOB shipping point (4) FOB shipping point
Which items should be included in Fetherston's inventory at December 31?
a. (2) and (3)
b. (1) and (4)
c. (1) and (3)
d. (2) and (4) 2. _____ Cost of goods sold is computed from the following equation:
a. beginning inventory – cost of goods purchased + ending inventory. …show more content…
b. sales – cost of goods purchased + beginning inventory – ending inventory.
c. sales + gross profit – ending inventory + beginning inventory.
d. beginning inventory + cost of goods purchased – ending inventory.
3. _____ A company just starting business made the following four inventory purchases in June:
June 1 150 units $ 390
June 10 200 units 585
June 15 200 units 630
June 28 150 units 510 $2,115
A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is
a. $683.
b. $825.
c. $1,290.
d. $1,432.
ACCT220 Fun Quiz Six Chapter Six Continued: Page 2 of 4
4. _____ Indrisano's Used Cars uses the specific identification method of costing inventory. During March, Indrisano purchased three cars for $12,000, $14,400, and $19,200, respectively. During March, two cars are sold for a total of $34,600. Indrisano determines that at March 31, the $14,400 car is still on hand. What is Indrisano’s gross profit for March?
a. $1,000.
b. $3,400.
c.
$4,200.
d. $8,200. 5. _____ Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2014 are as follows: Units Per unit price Total
Balance, 1/1/14 200 $5.00 $1,000
Purchase, 1/15/14 100 5.30 530
Purchase, 1/28/14 100 5.50 550
An end of the month (1/31/14) inventory showed that 160 units were on hand. If the company uses FIFO, what is the value of the ending inventory?
a. $800
b. $832
c. $848
d. $868
6. _____ Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2014 are as follows: Units Per unit price Total
Balance, 1/1/14 200 $5.00 $1,000
Purchase, 1/15/14 100 5.30 530
Purchase, 1/28/14 100 5.50 550
An end of the month (1/31/14) inventory showed that 160 units were on hand. If the company uses LIFO, what is the value of the ending inventory?
a. $800
b. $832
c. $848
d. $868
ACCT220 Fun Quiz Six Chapter Six Continued: Page 3 of 4 7. _____ Eneri Company's inventory records show the following data: Units Unit Cost
Inventory, January 1 10,000 $9.20
Purchases: June 18 9,000 8.00 November 8 6,000 …show more content…
7.00
A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. If the company uses FIFO, what is the gross profit for the period?
a. $95,000
b. $99,266
c. $99,960
d.
$103,800
8. _____ Netta Shutters has the following inventory information.
Nov. 1 Inventory 30 units @ $8.00 8 Purchase 120 units @ $8.30 17 Purchase 60 units @ $8.40 25 Purchase 90 units @ $8.80
A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is
a. $738.
b. $792.
c. $1,740.
d. $1,794. 9. _____ The accountant at Almira Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of $8,190. The LIFO method will result in income before taxes of $7,290. What is the difference in tax that would be paid between the two methods?
a. $270.
b. $630.
c. $900.
d. Cannot be determined from the information provided.
10._____ An error in the physical count of goods on hand at the end of a period resulted in a $15,000 overstatement of the ending inventory. The effect of this error in the current period is Cost of Goods Sold Net Income
a. Understated Understated
b. Overstated Overstated
c. Understated Overstated
d. Overstated
Understated
ACCT220 Fun Quiz Six Chapter Six Concluded: Page 4 of 4
II. Problem. Evaluate each (separate) inventory error and determine whether it overstates or understates each item.
Inventory Error
Cost of Goods Sold
Net Income
Understates beginning inventory
Understates ending inventory
Overstates beginning inventory
Overstates ending inventory
*****END OF ACCT220 FUN QUIZ SIX: CHAPTER SIX*****