FNU ACG2003 2022 October Week 5 Quiz Latest

ACG2003 Principles of Accounting

Week 5 Quiz

Question 1Under the perpetual inventory system, Village Fabrics purchased 25 yards of blue plaid fabric at a cost of $2.00 per yard on June 1; on June 3, 22 yards were sold of the blue plaid; a new shipment came in with 25 more yards at a cost of $2.25 per yard on June 5; on June 15, 17 yards of the blue plaid fabric were sold; Village Fabrics purchased another 25-yard bolt at a cost of $2.50 per yard on June 19; on June 27, 6 more yards had been sold. No inventory was on hand at the beginning of the month. What is the cost of merchandise sold and cost of inventory under the FIFO method for June?

$101.25; $67.50

$45.00; $30.00

$67.50; $101.25

$95.00; $73.75

Question 2The formula to calculate inventory turnover is:

Average inventory/Cost of merchandise sold.

Cost of merchandise sold/Average inventory.

Beginning inventory/Cost of merchandise sold.

Cost of merchandise sold/Ending inventory.

Question 3During the taking of a physical inventory on December 31, 2012, inventory was counted as $100,870 instead of the correct amount of $100,780. The effect of the error on the December 31, 2012 balance sheet and income statement will be:

ending inventory will be understated; gross profit will be overstated.

ending inventory will be overstated; cost of merchandise sold will be overstated.

ending inventory will be overstated; net income will be overstated.

ending inventory will be understated; cost of merchandise sold will be overstated.

Question 4Which statement about inventory costing methods is TRUE?

If the cost of units does not change, all three methods will yield the same results.

When LIFO is used during a period of rising prices, the company's gross profit will be higher.

During periods of rising prices, using FIFO offers an income tax savings.

All statements are true.

Question 5Under the periodic inventory system, Village Fabrics purchases navy plaid fabric used in its fabric-selling business in the following lots: June 5 - 4 yards at $2.50 per yard, June 12 - 7 yards at $3.00 per yard, June 17 - 8 yards at $3.50 per yard. What is the periodic average cost of the fabric per yard?

$2.50 per yard

3.00 per yard

$3.11 per yard

$3.05 per yard

Question 6Under the perpetual inventory system, Village Fabrics purchased 25 yards of blue plaid fabric at a cost of $2.00 per yard on June 1; on June 3, 22 yards were sold of the blue plaid, a new shipment came in with 25 more yards at a cost of $1.25 per yard on June 5, on June 15, 17 yards of the blue plaid fabric were sold; Village Fabrics purchased another 25-yard bolt at a cost of $1.00 per yard on June 19; on June 27, 6 more yards had been sold. What is the value of inventory as of June 30 under the FIFO method?

$71.25

$35.00

$75.00

$31.25

Question 7Under the periodic inventory system, Village Fabrics purchased 25 yards of blue plaid fabric at a cost of $2.00 per yard on June 1; on June 3, 22 yards were sold of the blue plaid; a new shipment came in with 25 more yards at a cost of $1.25 per yard on June 5; on June 15, 17 yards of the blue plaid fabric were sold; Village Fabrics purchased another 25-yard bolt at a cost of $1.00 per yard on June 19; on June 27, 6 more yards had been sold. What is the value of inventory as of June 30 under the FIFO method?

$31.25

$30.00

$57.50

$60.00

Question 8Under the periodic inventory system, Village Fabrics purchased 25 yards of blue plaid fabric at a cost of $2.00 per yard on June 1; on June 3, 22 yards were sold of the blue plaid; a new shipment came in with 25 more yards at a cost of $1.25 per yard on June 5; on June 15, 17 yards of the blue plaid fabric were sold; Village Fabrics purchased another 25-yard bolt at a cost of $1.00 per yard on June 19; on June 27, 6 more yards had been sold. What is the value of inventory as of June 30 under the LIFO method?

$50.00

$31.25

$56.25

$60.00

Question 9Under the perpetual inventory system, Village Fabrics purchased 25 yards of blue plaid fabric at a cost of $2.00 per yard on June 1; on June 3, 22 yards were sold of the blue plaid; a new shipment came in with 25 more yards at a cost of $1.25 per yard on June 5; on June 15, 17 yards of the blue plaid fabric were sold; Village Fabrics purchased another 25-yard bolt at a cost of $1.00 per yard on June 19; on June 27, 11 more yards had been sold. What is the value of inventory as of June 30 under the LIFO method?

$25.00

$35.00

$30.00

$31.25

Question 10Merchandise inventory is reported on the balance sheet in the section titled:

Current Liabilities.

Plant Assets.

Current Assets.

Owner's Equity.