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bus_591_-_quiz_3

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Question;At;May 1, 2012, Heineken Company had beginning inventory consisting of 100;units with a unit cost of $7. During May, the company purchased inventory;as follows;200 units at $7;300 units at $8;The company sold 500 units during the month for $12 per unit. Heineken;uses the average cost method. Heineken's gross profit for the month of;May is (Points: 1);$2,250 $3,750 $4,500 $6,000;1 of 10;Quark;Inc. just began business and made the following four inventory purchases;in June;June;1;150;units;$;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 250 units on hand. Using the FIFO inventory method, the amount;allocated to ending inventory for June is (Points: 1);$1,385. $1,425. $1,455. $1,475.;2 of 10;Which;of the following is not considered in computing net cost;of purchases? (Points: 1);Purchases;returns and allowances Purchases Freight;paid on purchased goods Freight;paid on goods shipped to customers;3 of 10;Atom;Company just began business and made the following four inventory;purchases in June;June;1;150;units;$;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 250 units on hand. Using the LIFO inventory method, the value of the;ending inventory on June 30 is (Points: 1);$1,385. $1,425. $1,455. $1,475.;4 of 10;In a;period of increasing prices, which inventory flow assumption will result;in the lowest amount of income tax expense? (Points: 1);FIFO LIFO Average;Cost Method Income;tax expense for the period will be the same under all assumptions.;5 of 10;Adams;Company is a retailer and uses a perpetual inventory system. Which;statement is correct? (Points: 1);Returns;of merchandise inventory by Adams Company to a manufacturer are credited to;Inventory. Freight;paid to get merchandise inventory to Adams Company's store is debited to;Freight Expense. A;return of merchandise inventory by one of Adams Company's customers is;credited to Inventory. Discounts;taken by Adams Company's customers are credited to Inventory.;6 of 10;Two;companies report the same cost of goods available for sale but each;employs a different inventory costing method. If the price of goods has;increased during the period, then the company using (Points: 1);LIFO;will have the highest ending inventory. FIFO;will have the highest cost of goods sold. FIFO;will have the highest ending inventory. LIFO;will have the lowest cost of goods sold.;7 of 10;Which;of the following statements is true regarding the;profit margin ratio? (Points: 1);The;profit margin ratio can be improved by decreasing the gross profit rate;and/or controlling operating expenses and other costs The;profit margin ratio does not vary across industries. Discount;stores with high merchandise turnover generally have higher profit margins. If;the profit margin ratio has a higher value, this suggests favorable return;on each dollar of sales.;8 of 10;In;periods of rising prices, which is an advantage of using the LIFO;inventory costing method? (Points: 1);Ending;inventory will include latest (most recent) costs and thus be more;realistic. Cost;of goods sold will include latest (most recent) costs and thus will be more;realistic. Net;income will be the highest and thus reflect the prosperity of the company. Phantom;profits are reported.;9 of 10;Gross;profit equals the difference between (Points: 1);net;income and operating expenses. net;sales revenues and cost of goods sold. net;sales revenues and operating expenses. net;sales revenues and cost of goods sold plus operating expenses.;10 of 10

 

Paper#37584 | Written in 18-Jul-2015

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