student id 21794894 exam 061690rr accounting for merchandising 640640
Student ID: 21794894 Exam: 061690RR ACCOUNTING FOR MERCHANDISING When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer. 1. Goods available for sale are $350,000; beginning inventory is $24,000; ending inventory is $32,000; and cost of goods sold is $275,000. The inventory turnover is A. 9.82. B. 12.50. C. 8.59. D. 11.46. 2. Committing a fraud because the employee feels that it will be easy to do is indicative of which part of the fraud triangle? A. Perceived pressure B. Perceived opportunity C. Rationalization D. Realization 3. A company has $8,200 in net sales, $1,100 in gross profit, $2,500 in ending inventory, and $2,000 in beginning inventory. The company’s cost of goods sold is A. $7,100. B. $6,200. C. $5,600. D. $5,700. 4. Goods available for sale are $118,000; beginning inventory is $37,000; ending inventory is $42,000; and cost of goods sold is $77,000. The inventory turnover is A. 2.99. B. 1.83. C. 1.95. D. 1.53. 5. Committing a fraud because the employee feels “I deserve a pay raise. The company owes this to me” is indicative of which part of the fraud triangle? A. Realization B. Perceived opportunity C. Perceived pressure D. Rationalization 6. Which of the following would probably not cause inventory shrinkage? A. Employee theft B. Spoilage of items C. Spills of items D. Correct counting of all inventory 7. One of the biggest factors in implementing SOX was A. disclosing deficiencies in internal controls. B. reviewing the financial reports. C. the cost of implementing the system. D. establishing internal control procedures. 8. When a merchandiser sells on account, which of the following is not needed to record the transaction? A. Inventory B. Cash C. Cost of goods sold D. Accounts receivable 9. New technology, like the latest cell phones and HDTV, would probably be costed using the A. moving average method of inventory costing. B. FIFO method of inventory costing. C. specific identification method of inventory costing. D. LIFO method of inventory costing. 10. Meranda Company reports the following inventory information: What is the total value of the merchandise under LCM (lower of cost or market)? Inventory Number Inventory Quantity Unit Cost Unit Market Value APD 3838 325 $56.78 $55.32 CPZ 1212 506 $92.31 $92.78 IXL 4039 817 $77.89 $79.31 EOD 3902 382 $19.38 $19.02 DKS 4823 626 $33.46 $30.74 A. $158,545.60 B. $157,147.60 C. $154,832.90 D. $156,230.80 11. A company’s current ratio increased from 1.23 to 1.45. What does this mean? A. There isn’t enough information to explain the increase. B. This means that current assets increased and current liabilities increased. C. This means that current assets decreased and current liabilities decreased. D. This means that current assets increased and current liabilities decreased. 12. A low gross profit percentage means that A. the cost of goods sold was relatively high. B. general and administrative expenses are very high. C. the cost of goods sold was relatively low. D. selling expenses are very low. 13. If current assets decrease and current liabilities increase, the current ratio A. will change based on the change in total assets. B. remains the same. C. increases. D. decreases. 14. Casey Company’s beginning inventory and purchases during the fiscal year ended December 31, 2012, were as follows: (Note: The company uses a perpetual system of inventory.) What is the cost of goods sold for Casey Company for 2012 using LIFO? Units Unit Price Total Cost January 1—Beginning Inventory 20 $12 $240 March 8—Sold 14 April 2—Purchase 30 $13 $390 June 5—Sold 25 Aug 6—Purchase 25 $14 $350 Sept 11—Sold 22 Total Cost of Inventory $980 Ending inventory is 14 units. A. $264 B. $801 C. $784 D. $308 15. Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs. Below is the inventory record for Product C124: Date Received Sold Cost/Unit Balance April 22 534 $6.58 $3,513.72 May 17 433 $6.70 $2,901.10 June 21 389 $6.76 $2,629.64 August 2 436 $6.44 $2,807.84 What is the average cost per unit after the receipt of the May 17 inventory (rounded to the nearest cent)? A. $6.00 B. $6.55 C. $6.63 D. $7.40 16. Nick Company reports the following inventory information: What is the total value of the merchandise under LCM (lower of cost or market)? Inventory Number Inventory Quantity Unit Cost Unit Market Value APD 4837 440 $51.29 $51.48 CPZ 2837 290 $76.59 $77.02 IXL 9291 310 $42.34 $42.47 EOD 1717 200 $22.19 $21.75 DKS 3088 180 $31.22 $31.17 A. $67,961.70 B. $68,210.30 C. $67,864.70 D. $68,113.30 17. Net sales times the historical gross profit percentage yields the estimated A. beginning inventory. B. gross profit. C. ending inventory. D. cost of goods sold. 18. A company’s gross profit percentage decreases from 58% to 51%. What does this mean? A. We can’t determine anything definite from the information given. B. This means that net income will be lower. C. This means that there will be a net loss. D. This means that net income will be higher. 19. Under Sarbanes Oxley, those officers signing off on the reports must have evaluated the company’s internal control within the previous A. nine months. B. six months. C. year. D. 90 days. 20. A drawback to using _______ when inventory costs are rising is that the company reports lower net income. End of exam A. LIFO B. specific identification costing C. average costing D. FIFO
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