Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 5, Problem 16E
To determine
Indicate whether FIFO, LIFO or weighted average applies for the given situations.
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QUESTION 11
Match the term on the left to the appropriate description on the right.
v Cost of goods available for sale (COGAS)
A. A valuation rule applied to ending inventory.
v LIFO reserve
B. The maximum value that cost of goods sold (COGS) can be in a period.
C. The amount by which inventory measured under FIFO would exceed inventory
measured under LIFO
v Lower-of-cost-or-market
v Inventory turnover ratio.
D. An inventory cost flow assumption.
E. A measure for evaluating a company's inventory management.
v FIFO (first-in, first out)
v Periodic inventory
F. A system for calculating COGS based on ending inventory value.
Question 19
If inventory prices are rising the method of inventory valuation that gives the highest profit and the highest ending inventory is:
a. FIFO.
b. LIFO.
c. Weighted average.
d. Perpetual method.
QUESTION 9
Which of the following statements is NOT true of Economic Order Quantity?
O A. The economic order quantity mathematically determines the minimum total inventory cost
O B. The EOQ is directly proportional to the sales per period
OC. The optìmal order size is determined by the EOQ model
O D. The EOQ ignores inventory reorder costs and inventory carrying costs
Chapter 5 Solutions
Survey Of Accounting
Ch. 5 - 1. What is the difference between accounts...Ch. 5 - Prob. 2QCh. 5 - 3. What type of account is the Allowance for...Ch. 5 - 4. What are two ways in which estimating...Ch. 5 - 5. When using the allowance method, why is...Ch. 5 - 6. What is the most common format for reporting...Ch. 5 - 7. Why is it necessary to mate an entry to...Ch. 5 - 8. What are some factors considered in estimating...Ch. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - 14. What is an advantage of using the percent of...Ch. 5 - 15. What is aging of accounts receivable?Ch. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - Prob. 18QCh. 5 - 21. What is accrued interest?Ch. 5 - How does the accrual of interest revenue or...Ch. 5 - Prob. 21QCh. 5 - Prob. 22QCh. 5 - Prob. 23QCh. 5 - Prob. 24QCh. 5 - Prob. 25QCh. 5 - 26. What types of costs do businesses avoid when...Ch. 5 - 1. Name and describe the four cost flow methods...Ch. 5 - 2. What are some advantages and disadvantages of...Ch. 5 - Prob. 29QCh. 5 - Prob. 30QCh. 5 - 5. In an inflationary period, which inventory cost...Ch. 5 - 6. In an inflationary period, which inventory cost...Ch. 5 - 7. What is the difference between the flow of...Ch. 5 - Prob. 34QCh. 5 - Prob. 35QCh. 5 - Prob. 36QCh. 5 - Prob. 37QCh. 5 - Prob. 38QCh. 5 - Prob. 39QCh. 5 - Prob. 1ECh. 5 - Exercise 7-1A Analysis of financial statement...Ch. 5 - Prob. 3ECh. 5 - Effect of recognizing uncollectible accounts...Ch. 5 - Analyzing financial statement effects of...Ch. 5 - Effect of recovering a receivable previously...Ch. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Roth Service Co. experienced the following...Ch. 5 - Prob. 11ECh. 5 - On May 1, 2018, Benzs Sandwich Shop loaned 10,000...Ch. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Luna Company accepted credit cards in payment for...Ch. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - The Shirt Shop had the following transactions for...Ch. 5 - Prob. 21ECh. 5 - Accounting for uncollectible accountstwo cycles...Ch. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Sage Inc. experienced the following transactions...Ch. 5 - The following transactions apply to Hooper Co. for...Ch. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - The following trial balance was prepared for Tile,...Ch. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 1ATCCh. 5 - Prob. 3ATCCh. 5 - Prob. 4ATCCh. 5 - Alonzo Saunders owns a small training services...
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- Effects of Inventory Costing Methods Refer to your answers for Filimonov Inc. in Cornerstone Exercises 6-22 through 6-24. Required: 1. In a period of rising prices, which inventory costing method produces the highest amount for ending inventory? 2. In a period of rising prices, which inventory costing method produces the highest net income? 3. In a period of rising prices, which inventory costing method produces the lowest payment for income taxes? 4. In a period of rising prices, which inventory method generally produces the most realistic amount for cost of goods sold? For inventory? Would your answer change if inventory prices were decreasing during the period?arrow_forwardWhich inventory cost flow assumption would consistently result in the highest income in a period of sustained inflation? a. FIFO b. LIFO c. Weighted average d. Specific identificationarrow_forwardIn a period of falling prices, the use of which inventory cost flow method would typically result in the highest cost of goods sold? a. FIFO b. LIFO c. Weighted average d. Specific identificationarrow_forward
- QUESTION 25 Which of the following is not an inventory method/cost flow assumption? O a. First-in, first-out O b. Average cost O c. Last-in, first-out O d. Lower-of-cost-or-marketarrow_forwardQUESTION 15 During a period when inventory costs are steadily increasing, which of the following is true? O a. Net income will be higher under LIFO than under FIFO. O b. Cost of goods sold will be lower under LIFO than under FIFO. O c. Ending inventory value will be higher under LIFO than under FIFO. O d. Income taxes will be lower under LIFO than under FIFO.arrow_forwardQUESTION 4 Which of the following is used to analyze the efficiency and effectiveness of inventory management? a. inventory turnover only b. number of days' sales in inventory only c. both inventory turnover and number of days' sales in inventory d. neither inventory turnover or number of days' sales in inventoryarrow_forward
- Comparing Inventory Methods Obj. 5 Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. In each space that follows, place the correct sign [less than (<), greater than (>), or equal ] for each comparison, assuming periods of rising prices. 1. FIFO inventory ____________ LIFO inventory 2. FIFO cost of goods sold ____________ LIFO cost of goods sold 3. FIFO net income ____________ LIFO net income 4. FIFO income taxes ____________ LIFO income taxes Why would management prefer to use LIFO over FIFO in periods of rising prices?arrow_forwardProblem 11-25 Multiple choice (IAA) 1. IFRS prohibits which cost flow assumption? a. LIFO b. Specific identification 6. Weighted average i Any of these cost flow assumptions is allowed с. , What is the inventory pricing procedure in which the oldest costs rarely have an effect on the ending inventory? a. FIFO b. LIFO c. Specific identification d. Weighted average 3. In a period of falling prices which inventory method generally provides the lowest amount of ending inventory? a. Weighted average b. FIFO c. Moving average d. Specific identification 4. Which inventory cost flow assumption would consistently result in the highest income in a period of rising prices or inflation? a. FIFO b. LIFO c. Weighted average d. Specific identification 3. The costing of inventory must be deferred until the end of reporting period under which of the following method of inventory valuation? a. Moving average b. Weighted average c. LIFÓ perpetual d. FIFO perpetualarrow_forwardPut the inventory valuation methods in order from which one yields the highest to which one yields the lowest merchandise inventory balance. Assume a period of rising prices. 1 2 3 FIFO method Average cost method LIFO methodarrow_forward
- QUESTION 9: The cost-to-retail ratio which is computed under the conventional retail inventory method (or LCNRV) is calculated: a. After markups (net) and before markdowns (net). b. Before both markups (net) and markdowns (net). c. After both markups (net) and markdowns (net). d. After markdowns (net) and before markups (net).arrow_forward38. In a period of falling prices, the use of which inventory cost flow method would typically result in the highest cost of goods sold? a• FIFO b• LIFO c• Weighted average d• Specific identificationarrow_forwardUnder which inventory cost flow assumption is the cost of the most recent purchase matched first with sales revenues? Select one: A. FIFO B. Weighted average cost C. LIFOarrow_forward
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