Choose the best answer

1			Beginning inventory 15 units @ $6 per unit First purchase 30 units @ $7 per unit First sale 25 units Second purchase 35 units @ $8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit What is the value of the ending inventory using a perpetual inventory system with the LIFO costing method?
			A)	$270
			B)	$285
			C)	$300
			D)	$490
			E)	None of the above
2			Beginning inventory 15 units @ $6 per unit First purchase 30 units @ $7 per unit First sale 25 units Second purchase 35 units @ $8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit What is the value of the ending inventory using a perpetual inventory system with the FIFO costing method?
			A)	$270
			B)	$275
			C)	$300
			D)	$460
			E)	None of the above
3			Beginning inventory 15 units @ $6 per unit First purchase 30 units @ $7 per unit First sale 25 units Second purchase 35 units @ $8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit Five units of the beginning inventory, 10 units of the first purchase, 5 units of the second purchase, and 15 units of the third purchase were not sold. What is the value of the ending inventory using a perpetual inventory system with the specific identification method?
			A)	$250
			B)	$265
			C)	$270
			D)	$275
			E)	$300
4			Beginning inventory 15 units @ $6 per unit First purchase 30 units @ $7 per unit First sale 25 units Second purchase 35 units @ $8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit What is the total value of the ending inventory using a perpetual inventory system with the weighted average costing method? (Your answer may not be exact to the penny, but it should be within a dollar of those given below).
			A)	$255.41
			B)	$264.28
			C)	$268.52
			D)	$273.54
			E)	$292.95
5			Which of the following is not a legitimate reason for taking a physical inventory count?
			A)	To check the accuracy of the perpetual inventory records
			B)	To determine cost of goods sold
			C)	To keep employees busy during a slow time in the business
			D)	To determine if any inventory has been lost from waste, shoplifting or employee theft
			E)	None of the above
6			The assignment of costs to cost of goods sold and ending inventory is different for perpetual and periodic inventory for which methods of inventory costing?
			A)	Weighted Average & FIFO
			B)	Specific identification & LIFO
			C)	FIFO & LIFO
			D)	LIFO & Weighted average
			E)	Specific identification and FIFO
7			Inventory at the end of the current period was erroneously overstated. Which of the following is true as a result of the error?
			A)	Net income for the current year is understated
			B)	Net income at the end of the following year will be understated
			C)	Capital at the end of the current year is understated
			D)	The cost of goods sold for the current year is overstated
			E)	Capital at the end of the following year will be overstated
8			Which of the following is true about errors in the ending inventory? Ending Inventory Cost of Goods Sold Net Income ---------------- ------------------ -----------
			A)	Overstated Understated Correctly stated
			B)	Understated Overstated Understated
			C)	Overstated Understated Understated
			D)	Understated Understated Overstated
			E)	Understated Overstated Overstated
9			Which of the following is true about errors in the ending inventory? Ending Inventory Net Income Capital ---------------- ------------------ ------------
			A)	Overstated Understated Overstated
			B)	Understated Understated Overstated
			C)	Overstated Understated Understated
			D)	Overstated Overstated Understated
			E)	Understated Understated Understated
10			Which of the following is true about errors in the beginning inventory? Beginning Inventory Cost of Goods Sold Net Income ------------------ ------------------ ------------
			A)	Overstated Overstated Understated
			B)	Understated Understated Understated
			C)	Overstated Understated Understated
			D)	Understated Overstated Understated
			E)	Understated Overstated Overstated
11			When prices are rising, which of the following will result in the highest amount of income tax expense?
			A)	LIFO
			B)	Weighted average
			C)	FIFO
			D)	None of the above
			E)	Not enough information is given
12			The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased are allocated in which of the following ways?
			A)	First to be allocated to the ending inventory
			B)	Last to be allocated to the cost of goods sold
			C)	Last to be allocated to the ending inventory
			D)	First to be allocated to the cost of good sold
			E)	None of the above
13			Lipton Hardware prepared the following schedule of unit costs and market prices for three items of merchandise inventory. Item Units Cost per unit Market price per unit A 1,500 $.30 $.25 B 4,000 .75 .80 C 2,500 .55 .45 Applying the lower-of-cost-or-market price rule, the total value of the entire inventory of the units would be reported as which of the following?
			A)	$5,025
			B)	$4,500
			C)	$4,825
			D)	$4,700
			E)	None of the above
14			When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin?
			A)	FIFO
			B)	LIFO
			C)	Weighted Average
			D)	Cannot be determined
			E)	None of the above
15			Beginning inventory totals $50,000 and ending inventory totals $70,000. Net sales totals $600,000 and cost of goods sold is $360,000. What is the inventory turnover ratio?
			A)	10.0
			B)	7.5
			C)	6.0
			D)	4.5
			E)	None of the above
16			Beginning inventory totals $50,000 and ending inventory totals $70,000. Net sales totals $600,000 and cost of goods sold is $360,000. What is the days' sales in inventory (to the nearest hundredth)?
			A)	36.50
			B)	42.58
			C)	60.83
			D)	70.97
			E)	121.67

THE NEXT FOUR QUESTIONS ARE BASED ON THE PERIODIC SYSTEM AND MATERIALS PRESENTED IN APPENDIX A OF CHAPTER 6.

17			Beginning inventory 15 units @ $6 per unit First purchase 30 units @ $7 per unit First sale 25 units Second purchase 35 units @ $8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit What is the value of the ending inventory using a periodic inventory system with the FIFO costing method?
			A)	$270
			B)	$275
			C)	$300
			D)	$460
			E)	None of the above
18			Date Quantity Cost Per Unit Total Cost Jan 1, Beginning Inventory 100 $36.00 $ 3,600.00 Mar 4, Purchase 400 38.00 15,200.00 May 8, Purchase 800 40.00 32,000.00 Nov 3, Purchase 500 42.00 21,000.00 Merchandise Available 1,800 $71,800.00 Five hundred and twenty units are unsold. Using LIFO costing and a periodic inventory system, what is the assigned to the ending merchandise inventory?
			A)	$18,720
			B)	$19,600
			C)	$21,800
			D)	$22,736
			E)	None of the above
19			Date Quantity Cost Per Unit Total Cost Jan 1, Beginning Inventory 100 $36.00 $ 3,600.00 Mar 4, Purchase 400 38.00 15,200.00 May 8, Purchase 800 36.50 29,200.00 Nov 3, Purchase 500 40.80 20,400.00 Merchandise Available 1,800 $68,400.00 Five-hundred units are unsold. Using a periodic inventory system and weighted average costing, what is the cost assigned to the ending merchandise inventory?
			A)	$18,800
			B)	$19,600
			C)	$20,400
			D)	$21,000
			E)	None of the above

THE LAST TWO QUESTIONS ARE BASED ON THE INVENTORY ESTIMATION MATERIALS PRESENTED IN APPENDIX B OF CHAPTER 6.

20			Harrison Hardware prepared the following schedule: Cost Retail Beginning merchandise inventory $ 50,000 $120,000 Purchases for November 190,000 280,000 Sales in November 360,000 Using the retail method for estimating the value of ending inventory, the estimated ending merchandise inventory at cost is which of the following?
			A)	$ 30,000
			B)	$180,000
			C)	$ 24,000
			D)	$ 20,000
			E)	None of the above
21			Heavenly Interiors had beginning merchandise inventory of $75,000. It made purchases of $160,000 and recorded sales of $220,000 during November. Its estimated gross profit on sales was 30%. On November 30, the store was destroyed by fire. What was the value of the merchandise inventory loss?
			A)	$154,000
			B)	$160,000
			C)	$235,000
			D)	$ 81,000
			E)	None of the above