A physical inventory is used to:A) investigate major errors.B) help prevent employee thefts or misuses of inventory.C) compare physical inventory to book inventory.D) All of these choices are correct.

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The inventory is added to the inventory records after three documents are reconciled. One of those documents is the:A) receiving report.B) company check.C) sales receipt.D) general journal.
Several controls are used to safeguard inventory EXCEPT:A) hiring security guards.B) keeping high-priced inventory behind lock and key.C) allowing all employees access to the materials warehouse.D) installing sensors at all exits.
The specific identification inventory method can be used:A) when the unit sold is identified with a specific purchase.B) by an automobile dealer where automobiles have unique serial numbers.C) when each inventory unit can be specifically identified.D) All of these choices are correct.
Which of the following is TRUE regarding the perpetual LIFO inventory method:A) Unit costs for each item are averaged each time a purchase is made.B) The cost of the units sold is the cost of the most recent purchases.C) Costs are included in the cost of merchandise sold in the order in which units were purchased.D) All of these choices are correct.
Which inventory cost method offers income tax savings during periods of rising prices:A) weighted average inventory cost methodB) LIFO inventory cost methodC) FIFO inventory cost methodD) specific identification inventory cost method
The inventory cost method that will yield a higher ending inventory during times of inflation will be the:A) specific identification inventory cost method.B) weighted average inventory cost method.C) FIFO inventory cost method.D) LIFO inventory cost method.
The cost method that will yield an ending inventory value that is somewhere between possible high and low costs (prices) using traditional costing methods is the:A) specific identification inventory cost method.B) weighted average inventory cost method.C) FIFO inventory cost method.D) LIFO inventory cost method.
The cash, land, inventory, and accounts receivable accounts are shown on the balance sheet. In which order should they be listed:A) cash, inventory, accounts receivable, landB) cash, accounts receivable, inventory, landC) land, inventory, accounts receivable, cashD) inventory, accounts receivable, cash, land
During the taking of the physical inventory, the company inadvertently counted its inventory as $98,000 instead of the correct amount of $89,000. Indicate the effect of the misstatement on the balance sheet of the current year:A) Liabilities are overstated by $9,000.B) Assets are overstated by $9,000.C) Assets are understated by $9,000.D) Stockholders" equity is understated by $9,000.
Regarding consigned inventory:A) the consignee retains the title to the inventory.B) the retailer is the consignor.C) the manufacturer is the consignor.D) the unsold merchandise is part of the consignee"s records at year end.
The inventory is added to the inventory records after all of the following are reconciled, EXCEPT the:A) vendor invoice.B) purchase order.C) sales invoice.D) receiving report.
The three most common inventory cost flow methods are:A) FIFO, LIFO, and specific identification.B) FIFO, LIFO, and weighted average cost.C) None of these choices are correct.D) FIFO, retail, and weighted average cost.
When the weighted average cost method is used for the perpetual inventory system, a weighted average unit cost for each item is determined:A) each time a purchase is made.B) at the end of the time period.C) None of these choices are correct.D) at the beginning of the time period.
Which of the following is a benefit of using a computerized perpetual inventory system:A) Computerized perpetual inventory systems help managers track inventory.B) Computerized perpetual inventory systems are helpful when recording many inventory transactions.C) All of these choices are benefits of using a computerized perpetual inventory system.D) Sales patterns can be analyzed easily when using computerized perpetual inventory systems.
Which of the following is TRUE regarding the perpetual FIFO inventory method:A) The cost of the units sold is the cost of the most recent purchases.B) Costs are included in the cost of merchandise sold in the order in which units were purchased.C) All of these choices are correct.D) Unit costs for each item are averaged each time a purchase is made.
The cost method that will yield the highest taxable income during times of inflation is the:A) LIFO inventory cost method.B) FIFO inventory cost method.C) specific identification inventory cost method.D) weighted average inventory cost method.
Merchandise inventory is found on the balance sheet as a:A) current liability.B) long-term liability.C) current asset.D) long-term asset.
Several controls are used to safeguard inventory, and one of those is to:A) keep low-priced inventory behind lock and key.B) allow all employees access to the materials warehouse.C) allow one employee to order inventory, check in shipments, and stock shelves with inventory to prevent errors.D) hire security guards.
Morgan Industries is comparing and contrasting its ending inventory value in terms of the three common inventory costing methods in order to help management determine the most appropriate method to use. The company determines three values, which are: $96,000, $100,000, and $105,000. If management determines that $100,000 is the most appropriate value for its ending inventory, what inventory cost method has it most likely chosen:A) middle of cost or market methodB) LIFO inventory cost methodC) FIFO inventory cost methodD) weighted average inventory cost method
Merchandise inventory should be reported as follows EXCEPT:A) None of these choices are correct.B) as a current asset on the balance sheet.C) at lower of cost or market.D) as a long-term asset on the balance sheet.
The cost method that will yield an ending inventory that is closer to current prices is the:A) specific identification inventory cost method.B) LIFO inventory cost method.C) FIFO inventory cost method.D) weighted average inventory cost method.

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During the taking of the physical inventory, the company inadvertently counted its inventory as $89,000 instead of the correct amount of $87,000. Indicate the effect of the misstatement on the balance sheet of the current year:A) Assets are understated by $2,000.B) Liabilities are overstated by $2,000.C) Stockholders" equity is understated by $2,000.D) Stockholders" equity is overstated by $2,000.
Gordon Company uses the retail method of inventory costing. The retail value of the ending inventory is $325,000. If the ratio of cost to retail price is 66%, what is the amount of the ending inventory to be reported on the financial statements:A) $214,500B) $110,500C) $325,000D) cannot be determined from the information given
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