Inventory and Cost of Goods Sold(Quick Test #2)

1. Normally, the Inventory account will report the goods on hand at the selling prices of the goods.

2. If the __________ __________ __________ of a company’s inventory is less than its cost, this lower amount will be reported on the company’s balance sheet.

3. If an error results in the amount of ending inventory being too high, the company’s reported net income will be too __________.

4. The periodic inventory system means that the balance in the account Inventory will change after each purchase and sale.

5. A manufacturer’s inventory is usually reported in three categories: raw materials, __________ __________ __________, and finished goods.

6. FIFO means __________–__________, __________–__________.

7. LIFO means __________ – __________, __________ – __________.

8. The cost flow assumption where the most recent costs are matched first with current period sales is __________.

9. The cost flow assumption where the oldest costs are more likely to be in inventory is __________.

10. The cost flow assumption where the more recent costs are in inventory is __________.

11. If a company uses the periodic system for inventory, the account that will be used to record the purchases of merchandise to be sold is __________.

12. When a company is using the __________ inventory system, the balance in the Inventory account throughout the current year is likely to be the prior year’s ending balance.

13. The actual counting of the goods in inventory is referred to as a __________ inventory.

14. Mary’s Crafts has $2,000 of goods on consignment at Smith’s Pharmacy at December 31. Who should report the goods as inventory at December 31?

15. The cost of office supplies is included in the Inventory account.

16. A company purchased the following quantities of Product 39JX for its inventory:
20 units at $20 = $400
40 units at $21 = $840
40 units at $23 = $920
The weighted-average cost of Product 39JX is $__________ per unit.

17. General administrative expense is part of a product’s cost for inventory valuation.

18. The depreciation of a factory building is assigned to the products manufactured and will be part of their cost for inventory valuation.

19. The change in the amount of inventory will affect the income statement amount reported as the __________ __________ __________ sold.

20. The annual cost of goods sold divided by the average inventory during the year is the formula for the inventory __________ ratio.