Term
| If goods in transit are shipped FOB destination |
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Definition
| the seller has legal title to the goods until they are delivered |
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Term
| Goods held on consignment are |
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Definition
| never owned by the consignee. |
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Term
| Manufacturers usually classify inventory into all the following general categories except: |
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Definition
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Term
| The LIFO inventory method assumes that the cost of the latest units purchased are |
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Definition
| the first to be allocated to cost of goods sold |
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Term
Baker Bakery Company just began business and made the following four inventory purchases in June:
June 1 150 units $780
June 10 200 units 1,170
June 15 200 units 1,260
June 28 150 units 990
$4,200
A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is |
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Definition
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Term
Atom Company just began business and made the following four inventory purchases in June:
June 1 150 units $825
June 10 200 units 1,120
June 15 200 units 1,140
June 28 150 units 885
$3,970
A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is |
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Definition
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Term
A company just began business and made the following four inventory purchases in June:
June 1 150 units $825
June 10 200 units 1,120
June 15 200 units 1,140
June 28 150 units 885
$3,970
A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30 is |
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Definition
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Term
Olympus Climbers Company has the following inventory data:
July 1 Beginning inventory 20 units at $19 $380
7 Purchases 70 units at $20 1,400
22 Purchases 10 units at $22 220
$2,000
A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is |
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Definition
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Term
Quiet Phones Company has the following inventory data:
July 1 Beginning inventory 20 units at $19 $380
7 Purchases 70 units at $20 1,400
22 Purchases 10 units at $22 220
$2,000
A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is |
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Definition
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Term
| Which of the following statements is correct with respect to inventories? |
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Definition
| Under FIFO, the ending inventory is based on the latest units purchased |
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Term
| In periods of rising prices, which is an advantage of using the LIFO inventory costing method? |
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Definition
| Cost of goods sold will include latest (most recent) costs and thus will be more realistic. |
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Term
At May 1, 2014, Heineken Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows:
▪ 400 units at $7
▪ 600 units at $8
The company sold 1,000 units during the month for $12 per unit. Heineken uses the average cost method. Heineken's gross profit for the month of May is |
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Definition
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Term
| In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory? |
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Definition
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Term
| In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense? |
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Definition
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Term
| When applying the lower of cost or market rule to inventory valuation, market generally means |
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Definition
| current replacement cost. |
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Term
| The situation that requires a departure from the cost basis of accounting to the lower of cost or market basis in valuing inventory is necessitated by |
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Definition
| a decline in the value of the inventory |
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Term
Nelson Corporation sells three different products. The following information is available on December 31:
Inventory item Units Cost per unit Market value per unit
X 150 $4.00 $3.50
Y 300 $2.00 $1.50
Z 750 $3.00 $4.00
When applying the lower of cost or market rule to each item, what will Nelson's total ending inventory balance be? |
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Definition
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Term
| The following information was available for Camara Company at December 31, 2014: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $560,000; and sales $800,000. Camara’s inventory turnover ratio in 2014 was |
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Definition
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Term
| The following information was available for Bowyer Company at December 31, 2014: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $880,000; and sales $1,200,000. Bowyer’s days in inventory in 2014 was |
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Definition
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Term
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Definition
| the difference between the value of the inventory under LIFO and the value under FIFO. |
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